OnePlus Marketing Strategies Analysis

This assignment requires an analysis of the marketing strategies employed by OnePlus, a Chinese smartphone manufacturer. Students are to examine OnePlus's brand positioning and evaluate its effectiveness in achieving market share and growth within the competitive global smartphone industry. The analysis should consider factors such as target audience, pricing strategies, distribution channels, and promotional campaigns.

MARKETING MANAGEMENT
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EXECUTIVE SUMMARY
This case study is premised on the philosophy of marketing management practiced by
OnePlus, a Chinese smartphone manufacturer founded in Shenzhen by Pete Lau and Carl Pei
in December 2013. The paper has traced the factors that helped the company to embrace
success and global acclaim in the early days. The factors incorporate a brilliant combination
of conventional promotional strategies along with unorthodox techniques such as giveaways
and contests. Adding to these factors, the focus on customer engagement and the
organisational philosophy of “Never Settle” has enabled the company to stay in competition
with major players such as Apple, Google and Samsung. Major customer segments of
OnePlus include tech enthusiasts, design enthusiasts, business professionals, baby boomers
and social teenagers. Out of these five segments, the company focuses on first three customer
segments, namely tech enthusiasts, design enthusiasts and business professionals have fuelled
the company to manufacture their products with a balanced combination of design and
performance. Furthermore, the case study has also analysed marketing mix (4Ps) and 5Cs of
OnePlus to formulate recommendations that can help the organisation to stay grounded while
growing and evolving. Major recommendations include enhancing customer engagement and
invest in R&D section. Apart from that, OnePlus is also suggested to expand their customer
support operations and setup additional support bases other than China. these
recommendations can make OnePlus retain their signature brand image in the intensive
competitive market and stand out in the crowd of numerous smartphone manufacturers.
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Table of Contents
Introduction................................................................................................................................4
Factors contributing to the early success of OnePlus.................................................................4
Analysing the customer segments and personas........................................................................9
Recommending the approach towards positioning and value proposition...............................13
Evaluating the marketing mix (4Ps).........................................................................................14
Conclusion................................................................................................................................17
Reference list............................................................................................................................18
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Introduction
Smartphone market has experienced a colossal rise in the last decade, owing to rapid
development of mobile technology. As a result, the global Smartphone market, which was
earlier dominated by big players such as Samsung, Nokia, HTC and Apple, has seen entry
and growth of several other Smartphone manufacturers, OnePlus being one of them. With the
decline of reputed brand name such as HTC and Nokia, Smartphone manufacturers from the
eastern world, especially Chinese, have came forward to fill the void. BBK Electronics
(parent company of OnePlus, Oppo Electronics and Vivo) and Xiaomi Inc. are two important
names in this regard that has revolutionised the Smartphone market with their budget smart
phones, unique marketing strategy and revolutionary customer-engagement programs.
In this context, present paper aims to provide a case study on the marketing strategy of
OnePlus, a Shenzhen based Smartphone manufacturer. For this purpose, following sections
will discuss and analyse the factors in their marketing strategy that have enabled the company
to scale the heights of success in a mere span of three years.
Figure 1: Logo of OnePlus
(Source: Oneplusstore.net, 2017)
Factors contributing to the early success of OnePlus
Fuelled by the bold conviction of making a better Smartphone, Pete Lau and Carl Pei founded
OnePlus in the December of 2013 in Shenzhen (Oneplusstore.net, 2017). The founders
founded this company not just for making better phones, but also to build such an tech
organisation that would collaboratively work with users to produce something innovating and
meaningful.
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39%
32%
22%
7%
Sales of OnePlus smartphones from different
regions (as of 2014)
East Asia
Europe
Noth America
India
Figure 2: Sales of OnePlus smartphones from different regions (as of 2014)
(Source: Oneplusstore.net, 2015)
As of 2014, the company has gained total revenue of $300M+ from four major regions,
namely East Asia (39% of total sales), Europe (32% of sales), North America (22% of sales)
and India (7% of sales) (Oneplusstore.net, 2015). These statistics clearly define the
monumental success OnePlus gained only through a business of three years. Following
factors could be attributed to this phenomenon -
A. Never Settle
In order to create a signature of their own, Carl Pei and Pete Lau enveloped a common
perspective of business management into a quirky catchphrase - “Never Settle”, and this
strategy clicked instantly (Oneplusstore.net, 2017). This phrase encompasses the strong urge
for continuous improvement and propelled the company to provide best value to their
stakeholders. As the founders envisioned making a better Android Smartphone that could
compete with the user experience with that of Apple iPhone, they sought to keep a close eye
on details of design, along with emphasizing on built quality and software experience.
Consequently, OnePlus launched their first flagship product, the OnePlus One, in April 2014
(Sawhney and Goodman, 2016, p.8). It was a high end and user friendly device available at
lower price range that major competitors. Naturally, the product gained immediate success in
European, Indian and US market. In this way, the urge for relentless improvement has
contributed to the early success of OnePlus; the same factor is also applicable even today.
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B) Targeting the tech-savvy customers
As per Rusko (2014, p.805), target marketing is a crucial element for success of an
organisation. OnePlus aimed to appeal tech-savvy customers with their high-end and elegant
products. Placing the tech-enthusiasts at the heart of organisational strategy helped OnePlus
to establish itself as global brand in a very short time.
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0
200
400
600
800
1000
1200
1400
1600
122.32 139.29 172.38
296.65
472
680.11
969.72
1244.74
1423.9 1495.36
Number of smartphones sold to end users
worldwide from 2007 to 2016 (in million
units)
Figure 3: Number of Smartphone sold to end users worldwide from 2007 to 2016 (in
million units)
(Source: statista.com, 2017)
C) Intensive social media promotion
In the opined by Strauss (2016, p.177), promotional strategies are highly effective for
building a brand image and OnePlus utilised the power of social media promotion to create
demand and awareness about their products. Through their official page in Facebook, official
account in Reddit and official handle in Twitter, the company redirected all the incoming
traffic to their website. As a result, the company received 25.6 million hits in December
2014, only after one year of site launch (Sawhney and Goodman, 2016, p.7). In addition, their
intensive advertising campaign also gained more than 828,000 followers in the OnePlus
forum by 2016 (Sawhney and Goodman, 2016, p.8).
D) User-engagement
As per the founder duo of OnePlus, the company aims to grow with customers, by sharing
experiences and allowing them to be a part of the organisation (Oneplusstore.net, 2017).
Thus, the focus on user-engagement enabled the company to stand out in the crowd of
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numerous Smartphone manufacturers (de Reuver et al. 2015, p.695). The slogan of “We
Create Together” created an emotional appeal to customer’s psyche, which engineered the
company to be counted as an international brand shortly after the launch of their first launch.
E) Unconventional strategies
OnePlus also employed several unorthodox strategies to promote their products. They
conducted contests and giveaways where the prize was an invitation for buying the OnePlus
One. The company conducted three consecutive giveaways in 12 days in spring 2014,
registering more than one million entries. As opined by Kim and Han (2014, p.260), these
unconventional promotion strategies took the Smartphone market by surprise and cemented
the company's foothold in the global market.
2014 2016
2.05
2.1
2.15
2.2
2.25
2.3
2.35
2.4
2.45
2.5
2.55
2.2
2.5
Chinese smartphone manufacturer
Oneplus's shipments worldwide from 2014
to 2016 (in millions)
Figure 4: Chinese Smartphone manufacturer Oneplus's shipments worldwide from
2014 to 2016 (in millions)
(Source: Satista.com, 2017)
F) Hosting pop-up stands
As a competitive stance against Apple iPhone, OnePlus hosted pop-up stands in nine cities
around the world to launch the OnePlus 2. The stand at New York attracted a cue of several
hundred individuals and nearly 1.6 million people made a request for buying this phone
(Sawhney and Goodman, 2016, p.8). Generally experienced at an Apple launch, such
enthusiasm was quite extraordinary for a Smartphone start-up of Chinese Origin, that too of
recent origin.
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Figure 5: 5Cs of OnePlus
(Soource: Sawhney and Goodman, 2016, p.10)
Customer Tech-savvy people searching for a smartphone with great built quality and
smooth user experience
Company [refer to SWOT analysis]
Competition Xiaomi, Google, Apple, Samsung, Oppo Electronics, Huawei
Collaboration Parentage of BBK Electronics, partnership with Amazon for global online sales
Context Political issues - abuse of labour law in China
Table 1: 5Cs analysis of OnePlus
(Source: In the perspective of Yeh et al. 2016, p.248)
Strengths
 Low Cost smartphones with High
specs
 Exclusive partnership with e-tailer
giant Amazon
 Distinct software platform - Oxygen
OS
Weaknesses
 Limited production capacity
 New entrant in the global market
 Limited number of products
 Selling only through online mode
Opportunities Threats
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 Strong presence in US, South Asian
and Western Europe market
 Huge potential in Australian market
 Availability of alternate products at
similar or lower price range
 Huge investments made by Oppo and
Vivo
Table 2: SWOT analysis of OnePlus
(Source: Inspired by the view of Page, 2013, p.39)
Analysing the customer segments and personas
Exhibit 8 illustrates five types of customer segments and associated personas. Analysis of
those segments, along with their pros and cons are illustrated in this section.
Figure 6: OnePlus Customer Segments
(Source: Sawhney and Goodman, 2016, p.25)
Segment Tech Enthusiast
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Analysis These customers prefer high-specs in phone rather than design. They possess an in-
depth knowledge about latest technological development and consider smartphones
as a symbol of their personality. Generally they hail from moderate income
background and usually are college students or engaged in technical professions. In
addition, they also prefer to distinct themselves with new and latest devices. They
are even willing to pay high price for mobile devices that can grant them smooth
and fast user experience (Truong et al. 2017, p.86).
Pros  Aware of technological advancements
 Can provide meaningful recommendations/solutions to the company on a
wide range of issues
 Can influence their peers about good devices and thus can help OnePlus to
penetrate in the market
Cons  Tends to shift from one brand to another randomly, less possession of brand
loyalty
 Small share in terms of total customer segments
Segment Design Enthusiast
Analysis Customers under this segment possess a passion towards creativity and highly
appreciate design of a mobile design. In order to obtain a device that has highly
visual appeal in terms of design, they are even willing to pay high price. Moreover,
they also prefer an easy user-experience from the smartphones. They consider
smartphones as a status symbol. On the contrary, these types of customers care little
about the specs as they are not willing to spend time in trying to maximise
productivity of a smartphone (Keller and Kotler, 2016, p.277). Comprising about
15% of total market segment, they have a strong sense for aesthetics and beauty and
mostly are female.
Pros  Belonging to high income group
 Affordability of premium smartphones
 Generally are loyal to a specific brand who provides great design
Cons  These customers are generally loyal to Apple devices, thus hard to crack by
OnePlus
 Does not appreciate high specs
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 Lack of feedback or suggestions for increasing device productivity
Segment Business professional
Analysis As mentioned by Chen et al. (2016, p.110), they consider smartphone as a tool for
utilising and maximising productivity of business. Therefore they seek factors such
as encryption and connectivity smartphones. They prioritise professional application
such as LinkedIn, Skype and Microsoft Office rather than media and entertainment
applications. They constitute roughly 30% of total market segment, and can afford
premium devices that can quench their requirements.
Pros  Preference on Android devices
 Notable presence in total market segment
 Loyal to brands who can provide smartphones with high productivity
Cons  Generally loyal to Microsoft (Surface Tablet )and Google (Nexus phones)
Segment Social Teenager
Analysis Lee et al. (2017, p.1015) has mentioned that they have grown around technology
from their childhood; therefore they are fluent in handling latest devices with ease.
As they do not belong to any income group, they are dependent on their parents for
purchasing smartphones. Thus, OnePlus can target the teenagers whose parents can
afford OnePlus smartphones. However, customers from this segment use
smartphones only for social networks and are ignorant of productivity (Chen et al.
2016, p.230).
Pros  Fluent in technology usage, “digital native”
 Majority is already familiar with smartphones and possess them
Cons  Lack of affordability of high-end phones owing to lack of income
 Using smartphone only for making social connections and entertainment
purpose, thus no constructive feedback to manufacturers
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Segment Baby Boomer
Analysis Sheth and Sisodia (2015, p.129) has termed the members of Baby boomer segments
as “digital immigrants”, generally aged more than 50 and who fumble in using latest
devices. They tend to grow an aversive attitude towards technology and seek only to
fulfil their rudimentary needs of connectivity and safety through phones. OnePlus
can make such individuals into loyal customers by providing safety and connectivity
applications (torch and SOS), user-friendly user interface (UI).
Pros  Opportunity to make loyal customer by providing basic connectivity and
safety needs in phones
Cons  Low level of affordability
 Generally aversive to latest technology
Now the five different customer segments and their associated persons have been analysed in
brief, it can be easily surmised that OnePlus will primarily focus on the first three customer
segments, namely - tech enthusiasts, design enthusiasts and business professional. Followings
are the justifications for this proposition-
 Firstly, these three segments make up 60% of total market size, a notable share of
market and full of opportunity.
 Secondly, customers from these three categories can afford to have premium
smartphones and that would not pinch their pocket. On the other hand, as Kim and
Han (2014, p.257) has pointed out, individuals belonging to social teenager or baby
boomer category generally do not spend a high amount in purchasing smartphones.
Naturally they are not economically productive customers for smartphone
manufacturers such as OnePlus.
 Thirdly, members from first three categories appreciate almost all the major features
of a typical smartphone - design, productivity and specs. Therefore, it would be
beneficial for a new entrant such OnePlus to satisfy the three segments as the
company would receive constructive feedback from them.
 Fourthly, discussion made above illustrates that customers from these three segments
are inclined towards Apple, Google and Microsoft - competitors of OnePlus.
Therefore, it would be immensely profitable in all aspects to cater to the needs of
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these three segments. It can not only increase the customer base of OnePlus
significantly but also would make the company an able competitor.
Recommending the approach towards positioning and value proposition
In order to realise the organisational slogan of “Never Settle”, OnePlus should emphasise on
pricing, design performance as well as user experience of their devices. Following
positioning and value propositions could be recommended for OnePlus to address the
requirements of these three selected target personas - tech enthusiast, business professionals
and design enthusiasts-
A. Value-based pricing - OnePlus should go for a value based pricing strategy for their
smartphones that would endow great value to users. In this way, customers will be
able to experience a high level of prove-to-productivity ratio in the OnePlus devices.
B. Delicate balance between design and performance - As a new entrant, OnePlus will
face several challenges from existing players in the market, who have notable
expertise and technological skills owing to their long tenure in smartphone market.
Naturally, it would tough for OnePlus to focus either on design (where Apple is the
biggest threat) or features and performance (Google and Microsoft being biggest
competitor). Therefore recommended approach is to maintain a delicate balance
between feature and design, so that the company can successfully address the
individual needs of each of three chosen customer segments.
C. User experience - Keeping the vision of “making better phones” in mind, OnePlus
should emphasis on providing peerless user experience to customers through their
smartphones. Their “Never Settle” slogan can propel them to practice innovation in
all aspects of their production and this can help the company to present customers
with products that are exclusively made as per their requirements.
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Figure 7: Recommendations for OnePlus
(Source: Influenced by Sawhney and Goodman, 2016, p.17)
In this context, it should be noted that reputed smartphone manufacturers such as Apple and
Google also aim to provide a high level of user experiences in their devices respectively
(Steenkamp, 2017, p.245). Therefore, OnePlus should practice unique approaches in their
business approach. For example, they can provide a powerful blend of high-specs and elegant
design bundled in a moderate price. In this way, OnePlus could emerge as a sustainable and
strong differentiator in the global smartphone market.
Despite these promising prospects, OnePlus should also take account of several factors that
could lead to downfall. For example, exclusive availability through online sales can launch a
cascading effect of customer complaints. The customer service being located at China can
cause severe problem if customer grievances are not solved within time or address properly
(Lee, 2015, p.2015). Therefore the company should also strengthen their customer support
division as without this wing OnePlus cannot aspire to become the product of choice for the
mass.
Evaluating the marketing mix (4Ps)
In order to recommend suitable strategies for OnePlus, an evaluation of marketing mix has
been presented in this section-
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Figure 8: 4Ps of OnePlus
(Source: Sawhney and Goodman, 2016, p.3)
Product
● State-of-the-art hardware
● Balanced combination of design and
features
Price
● Comparatively low price than major
competitors
Place
● Alternative distribution channels such as
e-tailers and brick-and-mortar stores
● Presence in 42 countries in four regions
Promotion
● Giveaway and contests
● Intensive social media promotion
● Word-of-mouth promotion
● Calculated mixture of online and offline
promotion
Table 3: Marketing mix (4Ps) of OnePlus
(Source: Festa et al. 2016, p.1551)
Based on this marketing mix, it can be recommended that OnePlus focus equally both on
online and offline promotion. This marketing strategy of utilising both the traditional and
online media can help the company to garner awareness among the young as well as aged
generation. Furthermore, it will also reduce the risk of failure associated with investing
resources in any single promotion strategy. Likewise, the company should also make their
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products available in offline stores, so that customers who prefer to have a look at the product
before purchasing can avail the facility.
As per Khan (2014, p.165), marketing mix is a useful tool for marketing strategy generation
and therefore the analysis obtained from Table 3 can help OnePlus to formulate effective
positioning strategies. The company aims to focus on three customer segments, namely - tech
enthusiasts, design enthusiasts and business professionals. Therefore, in order to position
OnePlus smartphones for these three categories the company have to be careful about the
pricing of their products also. As stated by Foxall (2014, p.219), business professionals could
afford high end smartphones owing to their belonging in high income group. A minor
fraction of design enthusiasts are also included in section. However, tech enthusiasts, owing
to their comparatively low level of income, cannot pay high prices for Smartphones.
In this context, OnePlus should practice both penetration and economy pricing strategies. As
Hollensen (2015, p.223) has pointed out, penetration pricing can help a new entrant to enter
market through a relatively low price level to attract customers and the same is also
applicable for OnePlus. On the other hand, economy pricing will help the organization to
appeal to the price-sensitive customer segments (Nagle et al. 2016, p.123). Therefore, it can
be surmised that through a well-planned combination of economy and penetration pricing
stratus, OnePlus could successfully capture majority of the customer segments discussed
about in the previous sections.
Now, OnePlus should also be careful to stay grounded while scaling the heights of success
lest the fork would lose touch with customers - their most important stakeholders; and it can
unleash drastic consequences upon the company. Firstly, the company practice their
philosophy of putting customers at the core of the business. This policy can help the company
to stay rooted and gain valuable insights from customers. In addition, this policy would also
be beneficial for the organisation to retain a loyal customer base - an element much coveted
by companies big and small. Secondly, to keep par with ever-evolving landscape of mobile
technology, the company should invest in R&D section while keeping an eye on the
customer's requirements. In this way, the company would be able to manufacture highly
competitive products that cater to need of customers. These recommendations would be
valuable for the company to retain their signature brand culture while riding growth.
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Conclusion
This paper has presented a case study on the marketing management of OnePlus, smartphone
manufacturers of Chinese origin gained immense popularity within three years of launching.
In order to understand the reasons behind such monumental success in such short period of
time, marketing strategies employed by OnePlus in their early days were unearthed and
critically analysed. The analysis revealed that OnePlus prioritised customer engagement,
employed unorthodox promotional schemes such as giveaways and contests and conducted
an intensive promotion campaign in social media. These factors allowed the company to be
recognised as a global brand shortly after their first product launch. This analysis was
accompanied by a SWOT and 5C analysis highlighted the internal elements of the company.
The next section analysed in detail five customer segments and the personality traits
exhibited by members of those groups. The analysis revealed that OnePlus should expand on
tech enthusiasts, business professionals and design enthusiasts; as they are more capable of
patronising the company towards success over the rest two categories - the baby boomers and
social teenagers. Value proposition and positioning statement was formulated on the basis of
that analysis. The final section incorporated a marketing mix of OnePlus and that helped to
recommend suggestions required for improvement. In this way, current case study exhibited a
holistic account on marketing management practices of OnePlus.
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