“Never Settle”, that’s the motto around which the Chinese smartphone company OnePlus is built (TAM, 2015). Established in 2013, with headquarters both in Hong Kong and Shenzhen, OnePlus is devoted to integrate users with the latest available technology in the market (TAM, 2015). The company believes in working alongside users to build their products and first company to introduce invite-only smartphone sales, which skyrocketed into an unprecedented level of demand (ROSENSTEIN, 2015). This report shows how OnePlus penetrated the already swarming smartphone market successfully by carefully segmenting, targeting and positioning themselves before they introduced their first smartphone, OnePlus ONE.
The main aim of this report is to analyse the market approach of the Chinese smartphone company, OnePlus. Segmentation, Targeting and Positioning (STP) marketing model is used to help describe the strategy used by OnePlus to approach the market. The STP analysis reveals that the company does not categorises and targets a narrow part of the demographic attributes but focuses on almost everyone who wants an unsurpassed smartphone which is limited in availability. The report concludes, the strategy formulated by the company to sell its only smartphone (initially) in the market successfully is by limiting its availability to create demand, hype and not easily available in market to purchase, subsequently creating a physiological ‘want’ in the human minds arising out of inquisitiveness (Newman, 2014).
Market Segmentation Strategy:
In order to understand the market need, the company conducted various market research’s and surveys. Their primary objectives was to know,
- Who will buy their new smartphone?
- What are people looking for, in terms of both specifications and functionality, in a new smartphone?
- How can OnePlus persuade someone to switch to one of OnePlus’ smartphone?
- What medium can OnePlus use to promote their products without spending hefty money on advertisements?
The data received from surveys conducted by OnePlus (2014a) helped them in dividing user market according to different segments such as:
- Geographic Segmentation
- Demographic Segmentation
- Psychographic Segmentation
- Benefit Segmentation
OnePlus has divided the markets regionally, this helped in understanding the different needs and wants of different regions separately. Thus aiding in developing appropriate market strategies which are not ill-suited for a selected region, consequently saving the company a lot of time and money which could have been spend unwantedly (Markgraf). Even though a start-up company, their regional approach helped them to achieve the trust and admiration of the local people. Several channels were opened in a systematic manner for customers to pre-order their smartphone. And only eighteen different countries were pre-selected for OnePlus One launch initially (OnePlus, 2014a).
The next major segmentation under which the markets are divided are on the basis of demographic variables such as Age, Sex, Occupation, family cycles etc. The most salient feature of demographic segmentation is the massive availability of data easily available and the ease at which it can be analysed (Gilligan, 2009). OnePlus is determined not to categorise their potential users according to demographic variables, nevertheless, they have targeted all users who are so particular about their products needs to be made out of high quality material and want the best specification in their smartphone.
Even though similar to Demographics, Psychographic segmentation divided the user base according to their lifestyle and values (RESTREPO, 2003). OnePlus segregates and targets those people whose lifestyles are more revolving around technology, to be more specific android geeks and nerds. Their first product, OnePlus ONE, was Cyanogen certified meaning the software (Android OS) was highly customizable to improve its performance (OnePlus, 2014a). Again, built on Android OS, integrated with all the high-end specifications, OnePlus ONE was launched with the slogan “flagship killer” shook competitors re-think their strategies (SNELLING, 2016). A competitive pricing and high specifications, matching or in some cases even beating other branded smartphones, everyone was clamouring for a piece of OnePlus ONE (Newman, 2014).
And lastly, benefit segmentation, where market is divided in terms of benefits, needs and values a customer expects from their products. OnePlus offered customers the best value for money product. Customers benefited from high-end specifications, build quality, ergonomics and even a better looking phone. Introduction of CyanogenMod 11 in OnePlus ONE also aided in satisfying customers who needed a smartphone which can be customized according to their preferences.
Success of a company greatly rely on the ability to identify their target markets i.e. to find where the company’s potential customers lies in the segmentation analysis (MCSORLEY, 2014). Some of the key strategic points of OnePlus Company were not to compete with the already established smartphone leaders, only manufacture limited number of products to create demand in the market, manufacture a phone for the android phone fanatics, and sell the product at a very unprincipled price creating a wave of ‘wow’ among technology enthusiasts (OnePlus, 2014b).
The target market of OnePlus lies within the limit of 14 to 35 years of age, offcourse based on their ability to buy the company’s products. It also encompasses those tech fanatics and Android lovers who likes to adopt it as soon as they are launched in the market.
Teenagers, lying between the age of 14 and 25 years are considered to appreciate technology is one of the company’s target markets. These age groups utilises their smartphone for socialising needs, and are expected to use applications such as Facebook, Instagram, Twitter etc (OnePlus, 2014b).
Moving to the age group of 26 to 35 years, due to their capability in buying OnePlus products, forms the biggest segment of OnePlus’ target market. These age group use their smartphone as a daily driver for making phone calls, send emails, Text Messaging, music, GPS for navigation and expect the battery to last till they call it a day (OnePlus, 2014b).
In the last stage of the Segmentation, Targeting and Positioning (STP) market model, the company needs to decide where they need to position themselves in the market to stand aside uniquely to focus on their target customers (Janiszewska, 2012). Positioning can help in creating a brand image in the minds of the target audiences and can only be argued in the execution of what differentiates it from other brands existing in the same market (Janiszewska, 2012). OnePlus identified two unique marketing plan based on which they positioned the company on the perceptual map, these attributes were Low Pricing and High Specifications. Figure 1a shows the position of OnePlus among all the other major companies in the perceptual mapping.
One could easily notice that, OnePlus stands apart from rest of the major companies. This makes it easier for a target user to certainly pick the product without thinking twice. It will be hard to predict at an early stage if the company moves away from the current positioning paradigm and invite-only strategy, whether or not users still be wanting to buy products launched by OnePlus.
We could observe that OnePlus market strategists effectively used the Segmentation, Targeting and Positioning (STP) market model to analyse the market, identify their potential customers and positioning strategically to differentiate from other players thereby creating a brand value within the users mind. OnePlus’ major success was fuelled by their market strategy of creating demand and publicity as one of the phones which all cannot have due to their limited availability (ROSENSTEIN, 2015). The system worked on an Invite-only option, i.e. only an already existing owner of an OnePlus One smartphone can send one invite to another potential customer. Secondly, the pricing was done perfectly to target both the age groups (teenagers and adults) without sacrificing on the quality of the product. Lastly, the smartphone was targeted towards all technology enthusiasts, United States is OnePlus Ones’ biggest market followed by India (ROSENSTEIN, 2015). To conclude this report, from the line a start-up company like OnePlus, with no brand value, effortlessly became one of the top ranked smartphone companies in the world, one could recognize the significance of market analysis that could break all records and how it can help in exploiting all the hidden opportunities lying within an existing market itself (Gilligan, 2009).
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