Challenges and Innovative Marketing Strategies for Lenovo

This study aims to identify the challenges being faced by Lenovo in terms of product proposition and marketing strategy and proposes innovative marketing strategies to overcome them.

Running head: INNOVATIVE MARKETING STRATEGIES
Part A: Individual Report (Innovative Marketing Strategies)
Name of the student:
Name of the university:
Author note:

1INNOVATIVE MARKETING STRATEGIES
Executive summary
This study aims to identify the challenges being faced by Lenovo in terms of product proposition
and marketing strategy. The company at present attracts customers those who need quality
performance. In order to be able to be preferred by mass it needs to change its marketing
strategy. Considering the identified need this study proposes a new marketing strategy following
all the elements of a marketing plan. The newly proposed marketing plan can be helpful in
positioning the new launches in a different and an effective manner. However, Lenovo must
maintain a balance between its premium-classed and mass-appealing products.

2INNOVATIVE MARKETING STRATEGIES
Table of Contents
Part A (Analysis):............................................................................................................................3
A critical evaluation of areas where Lenovo could be more innovative in respect to their
marketing approach.....................................................................................................................3
A background information on Lenovo:...................................................................................3
Situation analysis:....................................................................................................................3
Part B (Strategic Marketing Plan):................................................................................................14
Develop a strategic marketing plan basing the proposed marketing strategy for Lenovo.........14
Marketing objectives:............................................................................................................14
Financial objectives:..............................................................................................................14
Key summary of the Situation analysis:................................................................................14
Marketing strategies:.............................................................................................................15
Conclusion.................................................................................................................................19
References......................................................................................................................................20

3INNOVATIVE MARKETING STRATEGIES
Part A (Analysis):
A critical evaluation of areas where Lenovo could be more innovative in respect to their
marketing approach
A background information on Lenovo:
Lenovo is a Chinese based manufacturers of Smartphones, tablets, data systems and PCs.
The company was founded 34 years ago in 1984 (Lenovo.com 2019). It mounted to popularity
with its range of PCs. Today, Lenovo is also popularly known as one of the most popular mobile
phone brands I the world. Lenovo was able to gain a strong foothold in many emerging nations
and developed countries. Few of these countries are China, Brazil, Africa, India and the United
States of America (Lenovo.com 2019). Lenovo’s distribution strategy in China is so effective
that people have access to at least one Lenovo shop in a radius of 50 kilometers. In India, it
approached to private organisations and government agencies to sell its products in bulk. In
South Africa, it first established its own sales office and then gradually expanded to a more
diversified area of the region. Lenovo also has manufacturing facility located in the United States
of America (Lenovo.com 2019). This study aims to identify areas in Lenovo’s marketing
approach and product propositioning strategy that could further be made more innovative than
the existing.
Situation analysis:
Segment:
Lenovo offers a wide range of products in PCs, data systems and mobile phones. Some of
these are as listed below (Lenovo.com 2019):

4INNOVATIVE MARKETING STRATEGIES
 Workstation
 Storage devices
 Personal Computers (Desktop and Laptop)
 Servers
 Notebooks
 Accessories & upgrades
 IT software
The IT software being manufactured are named under the name “Think Vantage”. It
generates about half of the entire revenues for Lenovo. However, the major chunk of business for
Lenovo in China and in greater Asia/Pacific regions come from mainly the desktops, laptops &
notebooks, smartphones and the workstations. The highest revenue generating countries has been
China, Japan and the United States of America. A large number of desktops and laptops are
being sold in regions mentioned as above (Lenovo.com 2019).
Customers:
Two major customer segments for Lenovo can be classified broadly into two categories
like corporate and big business houses. The big and medium sized corporate houses buy laptops
or PC systems in bulk. They most of the time prefer buying from one brand if the offers are good
in comparison to other brands. This has also helped Lenovo establishing its strong foothold in
India (Glowik 2016). Desktops has always been huge revenue generator for the company. The
reason being the cost as desktops are less costly than laptops. Customers in small and mid-scale
markets had preferred purchasing more desktops than laptops as desktops are comparatively
cheaper and also more affordable than laptops (Zhang and Yang 2018). However, there is a
change in customer’s choice of the product. The small and mid-scale markets is now moving fast

5INNOVATIVE MARKETING STRATEGIES
towards the laptops. It has redefined market competition and brands are fighting for several
aspect of the product like pricing, design, durability, speed and battery backup (Glowik 2016).
The sales of laptops have now increased as highlighted in the above paragraph. It is due
to many reasons like its increased portability and high speed performance. Today, the sales
growth for laptops is higher than desktops.
Figure 1: Global Shipments of Tablets, Desktop PCs and Laptops 2010-2023
(Source: Statista 2019)
The figure clearly shows the changing landscape for Laptops and Tablets. Although there
is a drop in the global shipments of laptops from 2010; however, it is still ahead to desktop PCs
by a huge margin. The desktop PC segment is expected to lose its reach and popularity in nearing
future.

6INNOVATIVE MARKETING STRATEGIES
Considering the figure as covered above Lenovo should focus more on small-to-mid scale
markets to capture the growing market segment. To do so, Lenovo must focus on few factors that
work well for laptops. These are pricing, performance, battery backup and design.
Marketing mix:
Product: As stated earlier, Lenovo offers a range of products such as desktop PCs, laptops,
tablets, smartphones, work stations, software and other accessories. The company enjoys a very
good business in China, Japan, the United States of America, India and Asia/Pacific regions
(Nytimes.com 2019). However, there are a few areas where Lenovo can still work on to improve.
One of these areas is “Pricing”. Lenovo lags behind to other smartphone brands in pricing.
Indeed, other Chinese smartphone makers like Huawei, Oppo, Xiaomi and Vivo are performing
comparatively better than Lenovo. These brands have even outplaced Apple in many countries.
The list of the countries include Germany, India, France and Southeast Asia (Nytimes.com
2019). The reason behind the growing dominion in the form of these Chinese phone brads is
their ability to offer value at prices that are far much lower than of Apple and Lenovo. On a
similar note, Lenovo is not an ideal solution for customers when come to price. Instead, Dell and
Acer provides better buy reason to customers with their power-packed performance and
comparatively affordable pricing (Engadget 2019).
Price: Lenovo’s laptops are priced higher than Dell, HP and Acer. However, the quality of
laptops is better than HP and Dell. Lenovo scores in terms of quality. However, it needs to think
on the pricing part as it faces stiff competition from Acer that offers quality laptops at prices
even lower than of Lenovo’s (McDONALD 2016).

7INNOVATIVE MARKETING STRATEGIES
Place: Lenovo is headquartered in Beijing, China. The brand has its existence in and across the
globe. Some of the countries include Singapore, the United States, Japan, South Africa, Brazil,
India and Asia/Pacific regions. In China alone it has centers located in Shanghai, Chengdu,
Xiamen and Shenzhen, and Yamato in Japan (Lenovo.com 2019).
Promotion: Lenovo has always produced products as appropriate fit for their customers. They
believe that their products are like machines, which do a multi kind of tasking. Lenovo uses both
above the line (ABL) and below the line (BTL) strategy to promote products. They do promotion
to enhance community engagement and media engagement with the products. They achieve this
in numerous ways like through print media, TV, website, radio, outdoor billboards and direct
mail etc. Public activities like fundraising events and charity shows are also being used. Lenovo
also maintain a connectivity with local organisations like high school and universities by
conducting or sponsoring education fares. The company also uses a various social media
platforms to get connected with young people to encourage them to follow Tweets, and do posts
on Facebook and blogs. The company also advertise its products on radios and television. It also
uses official sites and many search engines to advertise its latest offerings (Lidstone and
MacLennan 2017). Lenovo should also learn from HP about how it connects with millennials
over YouTube. HP invests half of its budget on digital media (Lidstone and MacLennan 2017).
Competitors:
Top and close competitors to Lenovo in the laptop segment are Dell and HP. Acer also
gives tough competition to Lenovo as it is comparatively lower priced and packed with good
features. In the smartphone segment, it faces stiff competition from Xiaomi, Vivo, Oppo and
Huawei (Lenovo.com 2019).

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Dell: Dell is one of the most prestigious and widely admired laptop brands in and across
the world. They are one of the highest suppliers of desktop and laptops in Europe and North
America. It equals Lenovo in terms of supplying a huge amount of notebooks to a various parts
of world. Approximately half of the consumers in North America and Europe use laptops and
desktop PCs from Dell. Low price and fair features are the biggest strengths of Dell. It also
scores higher in terms of innovation; however, trails behind in regards to the design (Dell.com
2019).
HP: HP is considered the next largest suppliers of desktop PCs and laptops after Dell. HP
also has a strong foothold in North America and Europe. HP has improved its performance in the
laptop segment in recent time. Despite holding substantial market shares HP lags behind to
Lenovo and other majors in terms of providing customer satisfaction and high quality products
(Www8.hp.com 2019).
PESTEL analysis:
Political: Since almost half of the last century computers have become very important for
common people, business organisations, enterprises and all. Computers are used to reduce the
time span consumed in noting down something and researching the needed contents on the
internet. It has helped organisations immensely in boosting the performance. However, it also
faces some challenges in the form of energy consumption, environment pollution ad health
risks. In China, the government has announced following a green IT strategy to promote lower
energy consumption and reduced noise pollution. Lenovo have met already these requirements
(Wang, Chen and Benitez-Amado 2015). Export is one of the major parts of Lenovo’s business.
China has the world’s largest population. Hence, labour availability in the country is better than
many others. Also that wages are still very much at par with the countries having lowest labour

9INNOVATIVE MARKETING STRATEGIES
wages. This was few of the reasons why Lenovo has many of its factories in China. Due to China
being a part of the World Trade Organisation (WTO) the export tariff for the IT industry has
decreased. These policies will only encourage the business to reach to the global platform
(Wang, Chen and Benitez-Amado 2015).
Economic: There is increased support in form of government spending on the IT sector.
The GDP growth has been on a very positive side for the country. The disposable personal
income has also increased. These are positive platforms for an increased demand for goods and
services (Shin 2016). These are positive platforms for ant IT-based Company to prosper and
flourish.
Social: The demand of high technology products gets influenced from lifestyle choice,
population health, population growth, attitudes and social mobility (Ibrar, Mi and Rafiq 2016).
The globalisation and the lifestyle of globalized countries have also inspired China. Their
lifestyle is now bit luxurious. This develops a favourable consumption custom for Lenovo in
China. Indeed, the social culture of China has seen a transition into modern lifestyle from
traditional feudalism. This has a positive impact on the business of Lenovo.
Technological: Lenovo was backed up by a team of 11 scientists who were a part of the
Chinese Academy of Science. This is a governmental organisation. This offered a good
technological background to the company. The acquisition of IBM impacted its research and
development activities. This helped Lenovo offer quality products with enhanced innovation. A
reduced communication-costs and easier remotely controlled work helped Lenovo to further its
research and development capability (Schnoll 2015). All these factors could be helpful for the
company in short-term.

10INNOVATIVE MARKETING STRATEGIES
Environmental: The Company considerably faces challenges from environment pollution
and health issues of people. This may have an impact on the company in long-term (Shapiro
2016).
Legal: The Consumer Protection Law in China does not allow competitors competing in
an illegal manner. This is good for Lenovo considering that there will be fair battle between the
companies. Again, the Chinese government encourages and appreciates those that use advanced
technologies to offer quality products (Zheng 2019). This makes up a positive point for Lenovo
in China.
SWOT analysis of Lenovo:
Strengths: The major strength areas are its market share and current brand proposition.
Lenovo is the world’s third largest technological enterprise after Dell and Hewlett-Packard in
terms of sales (Investor.lenovo.com 2019). Since its acquisition of IBM, Lenovo has its constant
focus on providing quality products to customers. In the Chinese computers market, Lenovo
enjoys a huge market share that is equal to 29% (Investor.lenovo.com 2019). Many of the major
innovations were first introduced by Lenovo such as the launch of ThinkPad X300
(Investor.lenovo.com 2019). The product line is quite versatile. This means they have something
for each one of the categories of customers. Lenovo maintains the optimum quality in the
manufacturing process. Lower marginal cost is one of the strengths of Lenovo that helps it
maintain an effective competitive position. The branding strategy is also one of the strengths of
Lenovo. The brand name IBM helped Lenovo acquire a good recognition in the corporate sector.
Under this identity Lenovo has offered some top-notch products in the form of IdeaPad and
ThinkPad without the brand IBM. Lenovo should continue with this as it might support them in
long run.

11INNOVATIVE MARKETING STRATEGIES
Weaknesses: Lenovo does not have a team of specialist experts as good as Dell and HP
have. In addition, the marketing capability of Lenovo is less competitive to local brands such as
in the United States of America. Despite this being a fact Lenovo has been able to offer best-in
class service to customers. Lenovo faces the challenge for carrying a logo of IBM and belonging
to China, which has the reputation to offer produce cheaper and low quality products (Zhang and
Yang 2018).
Opportunities: Low marginal cost and a wide range of distinguished products provide
Lenovo an opportunity to be converted into a one-stop enterprise. An enterprise that sells high-
end products like IBM ThinkPad and mid-lower computers to business organisations. The
company also has opportunities to grow in some of the developing sectors like PCs and mobile
phones (Investor.lenovo.com 2019).
Threats: Dell and HP provides Lenovo the biggest threats. Nevertheless, Acer is also
posing solid competition to Lenovo with its quality features and comparatively lower pricing.
Apple is also using innovation to take the advantage of the opportunities in this industry (Kumar
and Paul 2018).
Marketing strategy:
The marketing strategy of the company is based on simple principles. Lenovo wants to
practice a fair-business by offering quality products to customers. They intend to attract
customers, retain them with best offers and establish a long-term relationship with them by
attaining business sustainability. However, attraction could be affected in long-term if Lenovo
does not work on its pricing and tech-support part. Notably, Lenovo’s products are priced higher

12INNOVATIVE MARKETING STRATEGIES
as compared to its competitors Dell and HP. Additionally, tech support follow-up service is not
as effective as compared to Dell’s (Tech.co 2019).
Management:
Due to being recognised under IBM banner, it is important for Lenovo to maintain
similar culture as practiced by IBM to be able to retain the ex-employees of IBM. The biggest
challenge that Lenovo faces is attracting and hiring the ex-executives of IBM. It is required to
maintain and practice the same organisational culture as practiced in IBM earlier
(Iis.quamnet.com 2019).
Branding:
Lenovo has efficiently handled its branding strategy. It has used the name of IBM in an
efficient manner. The name IBM was helpful for Lenovo in developing its image in the corporate
market. However, Lenovo should create its separate identity by popularising its name as the
branding for all its products instead of using the IBM (Iis.quamnet.com 2019). This will help the
company in long-term.
Target audience:
The target audience comprises of common people, corporate business and large business
organisations. Lenovo beliefs that co-branding would be more effective in attracting and
satisfying its target audience. However, it should have a separate identity as discussed earlier in
the branding section (Aghdaie and Alimardani 2015).
Growth opportunities:

13INNOVATIVE MARKETING STRATEGIES
There are substantial growth opportunities for Lenovo. The company has not yet been
able to drive the small-to-mid scale market as did by Dell. Pricing and innovation has been few
of the most prominent reasons for this fact. The product quality of Dell is not as good as of
Lenovo; however, it scores better in terms of pricing. This is what provides Dell an edge over
Lenovo. Indeed, it also has price-based competition from Acer. Lenovo needs to work in this
area to be able to catch up with the low-to-mid scale market (Iis.quamnet.com 2019). Notably,
this is a booming market segment (Mediapost.com 2019). Lenovo should not miss this growing
opportunity but rather look for it by offering new range of laptops and notebooks, which are
comparatively cheaper than of Dells’ and Acers’.
A healthy competition with Apple and HP:
Lenovo should maintain a healthy competition with HP, Dell, Apple and Acer. In doing
so, Lenovo will need a revisit to its marketing and product propositioning strategy. Lenovo
products are fairly priced considering the level of quality it offers with many of its products.
However, as identified earlier Lenovo does not stand firm-strong in front of HP, Dell and Acer in
terms of pricing. Additionally, Dell is ahead to Lenovo in terms of product innovation (Tech.co
2019). Tech-support is one of the few lookouts, which customers before they decide purchasing a
laptop or a notebook. It is to avail a hassle-free post-sales service on the purchase. Lenovo does
not have an established infrastructure as that of Dell to provide the tech-support service (Prajogo
2016).
Recommendation:
Products propositioning: Lenovo’s pricing strategy makes it more suitable to high-end
users, not so to the low-to-mid scale market. Additionally, it does to offer quality as good as HP

14INNOVATIVE MARKETING STRATEGIES
does. Lenovo needs to clearly define and promote its product strategy, so that, sales are boosted.
The safest way to achieve this would be to target the low and mid-scale markets, which is
booming these days. More customers in this segment of the market prefer buying laptops or
notebooks that offer best value to their investment. This comprises of high-features available in
competitive price range.
Market strategy: Lenovo apart from products’ pricing should also work upon its
promotion strategy. As stated earlier in this study, HP efficiently connects to millennials by using
the YouTube platform. Lenovo should also follow the similar path and use YouTube to its
maximum benefits. Lenovo can do this by following the cultural and event celebration in
different parts of the world, and uploading videos suiting the chosen theme. It means the product
should establish its connectivity to the target culture or event in a meaningful way.
Part B (Strategic Marketing Plan):
Develop a strategic marketing plan basing the proposed marketing strategy for Lenovo
Marketing objectives:
Marketing objectives of Lenovo are as under,
 Creating awareness among the buyers of Laptops and Notebooks about every new launch
of a company’s product
 Creating a brand image and enhancing a reputation in the industry
Financial objectives:
Some of the key financial objectives are as stated below,

15INNOVATIVE MARKETING STRATEGIES
 The main objective is to improve the overall wealth of the company and increasing the
turnover as well
 To minimise the overall cost
 To be able to maintain a good working capital
Key summary of the Situation analysis:
Lenovo faces few political challenges in forms of energy consumption, health risks and
environment pollution. It faces no such issues in regards to the labour workforce and minimum
wages. Labours availability is good and wages are minimum. Export tariff is low that provides
good opportunity to engage in trade with overseas countries. The GDP growth and disposable
personal income create positive environment for Lenovo. The lifestyle of the Chinese people is
getting influenced from the international countries. This provides a positive platform for Lenovo
in the country. The brand image of IBM has worked so far; however, Lenovo should try and call
the ex-executives of IBM to practice similar culture as that of IBM. Environment pollution,
energy consumption and health issues should be taken care with extensive measures. A fair
competition policy in Chins should continue to strengthen its foothold in the country and in
overseas locations.
Marketing strategies:
It is important to build up a good marketing strategy, so that, effectiveness in advertising
capability of Lenovo is achieved. The main focus of this marketing strategy is to be able to create
awareness into and attract the millennials.
Segmentation and Targeting:
Lenovo should use the mentioned as under,

16INNOVATIVE MARKETING STRATEGIES
 Demographic segmentation to be able to address the age, gender, occupation and socio-
economic status for targeting customers especially millennials and segregating their
product lineup
 Psychographic segmentation to target the customer based on their lifestyle (Posthumus
2015)
Positioning:
Lenovo should offer a new series of budget laptops and differentiate with its other
lineups. There is a need to highlight the key features of this new series (Hidayat 2017).
Marketing mix:
Product: The Company deals with a range of laptops and notebooks in particular. This
marketing strategy will be used for marketing a new series of budget laptops.
Price: The pricing is generally higher in comparison to other brands such as Dell and Acer. The
products are perceived as quality laptops and notebooks. Lenovo should bring up new series of
laptops, notebooks and smartphones that easily fit with the pocket of the people belonging to the
low and mid-scale market.
Place: The product quality helps Lenovo maintain a significant reputation in the market. Lenovo
can use both in-store and online channels for selling its products.
Promotion: In order to create and be able to differ from its existing image it is important for
Lenovo to promote their products in an effective manner. Online sales channels can be used for
promoting and selling laptops, notebooks and smartphones. Online buy should also give lucrative
offers on every buy like discounted rates of the products and more (Kladou and Mavragani

17INNOVATIVE MARKETING STRATEGIES
2015). In addition, YouTube can be used to promote the launch of every new product and to
create a much-needed hype of the product. Videos uploaded to the YouTube site should be
engaging to users (Tuten and Solomon 2017).
Action plan:
The following action plan needs to be adopted and implemented to be able to provide
robustness to marketing strategies,
 Public events: Pubic events can help to gain significant awareness on the product and
help to promote the product as well (Hudson and Hudson 2017).
 Sponsorship: Sponsoring the product in many different high profile shows and events
can be a good way to promote the product and create awareness among the people (Pitas
et al. 2018).
 Social media marketing: This can be a very powerful tool in reaching to consumers
especially to millennials. Notably, HP excellently manages to connect to the millennials.
Millennials are the rising customers of laptops, notebooks and smartphones
(Geekculture.co 2019). They can be attracted towards the offers by connecting to them on
various social media sites. For an example, Facebook can be used to advertise the offer
and encourage like, comments and sharing of the posts. Any new offer in this way will
reach to a large consumer base in a very less amount of time. Twitter is another very
good way to actually interact with followers. It gives some real opportunity to interact
with people, and know their feedback on the product (Zhu and Chen 2015). Their
feedback can be used to make further amendments in the product. Similarly, YouTube
can also be used engage in a different manner such as through a video that smartly
describes the value that the product carries (Chang, Yu and Lu 2015).

18INNOVATIVE MARKETING STRATEGIES
 Influencer marketing: Influencers can significantly help to popularise the product.
Therefore, it is important that influencers are hired and are used for the promotion
purpose (Dahl 2018).
 Television marketing: Television marketing is a traditional mode of advertising the
product during a daily-popular soap or an event. It substantially influences the customer
and their decision-making intend (Hudson et al. 2016).
Marketing budget:
Actions Expected Budget
Public events £ 16,500.00
Influencer marketing £ 11,020.00
Client event £ 1,570.00
Online marketing £ 40,900.00
Television marketing £ 55,100.00
Social media marketing £ 61,000.00
Press release £ 1,800.00
Content marketing £ 59,020.00
Sponsorships £ 36,000.00
Table 1: Programming Calendar
(Source: As created by the author)
Measuring the effectiveness of the plan:
The below mentioned tools can help to measure the effectiveness of the plan (Lidstone and
MacLennan 2017),

19INNOVATIVE MARKETING STRATEGIES
Google Analytics: This creates a huge chunk of data making it available to those who all are
involved in measuring the effectiveness of the marketing plan. Free versions are also allowed;
however, Lenovo should buy a premium version the cost of which starts around £115,048
(Gordon, Shand and Black 2016). The key features of this are as under,
 Operates and supports a data-driven acknowledgement model
 Contains the advanced segments
 Has many comparison tools
 Provides a real-time reporting opportunity
 Is able to perform both cross-device measurement and cross-platform
Rapid Miner: It works best for machine learning, data mining and predictive analytics. This can
cost around £2,301 (Abro, Nawaz and Abro 2016). Key features are,
 Helps to connect important data with business processes and key analytics
 Provides an excellent graphic interface
 Support predictive modelling
 Produces quite an accurate data
Conclusion
To conclude, it can be said that there is a definite need for the company to revise its
marketing strategy and implement a new such as one proposed in this study. This can be helpful
in promoting new launches in a highly engaging manner. The proposed marketing plan is made
both in accordance to marketing and financial strategy of the company. The proposed marketing
plan has considered budgeting based on current price standard for all the required activities. It is

20INNOVATIVE MARKETING STRATEGIES
not advisable to offer all products in budget range. Indeed, Lenovo should strike a balance
between both budget and premium products.

21INNOVATIVE MARKETING STRATEGIES
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