One plus
In early 2016, after the success of its first two smartphones, the OnePlus One and
OnePlus 2, China-based startup smartphone maker OnePlus was deciding how to build
on its early success and grow into a global contender in the highly competitive
smartphone market. Technology enthusiasts and geeks had flocked to purchase the first
two generations of its smartphones and expectations were high for the company's next
product. The company's founders, Pete Lau and Carl Pei, faced the challenge of
broadening the appeal of OnePlus to address the mainstream market without alienating
its core customer base. "Crossing the chasm" from the early adopters to the mainstream
market involved addressing three interrelated questions: First, what segments should
OnePlus target as it sought to grow beyond its loyal fan base? Second, what value
proposition and positioning strategy should it adopt to appeal to these target
customers? Finally, what distribution and marketing communications strategy should it
employ to make best use of its limited financial resources? A key consideration in
formulating its strategy was to stay true to the company's culture and mission of "Never
Settle" by charting its own course and not emulating the strategies of much larger
competitors like Apple, Samsung, LG, and HTC.
The basic motive of this product is following below:
1 - Channels of Distribution,
2 - Pricing,
3 - Servicing,
4 - Merchandising – Product Planning ,
5 - Advertising ,
6 - Packaging,
7 - Display,
8 - Branding,
9 - Promotions,
10 - Personal Selling,
11 - Marketing Research – Fact Finding and Analysis,
The 4Ps of Marketing Mix are -
1. Product : The products Oneplus Smartphone is making or are in the pipeline to capture
potential markets.
2. Price : Pricing strategy that Oneplus Smartphone is pursuing in various customer segments it
is operating in.
3. Place: (Channels of Distribution ) – Distribution mix of Oneplus Smartphone has taken a new
dimension with the emergence of Online Retailing & domination of players such as Amazon.
4. Promotion (Communication Strategy of Oneplus Smartphone) : The emergence of social
media and online advertising has changed the landscape of Oneplus Smartphone
communication mix and communication strategy.
Product - Broad Recommendations
1. Oneplus Smartphone can try to reposition the products from the existing brands
within one line.
2. Oneplus Smartphone can think of ways - how features and value can be added to
existing brands that help them in consolidating and increasing their market position.
3. Oneplus Smartphone can stop selling the products that are either not profitable or
not creating enough differentiation from the existing products.
4. Oneplus Smartphone can introduce a new brand in the existing product line or it can
strive to establish a whole new product line.
Product Line Planning Decision:
There are three major product line planning decisions that Oneplus Smartphone can
take – Product Line Breadth decision, Product Line Length decision, and Product Line
Depth decisions.
Some of the considerations that marketing managers at companyname need to take
while making product line decisions are –
1. How the new product brand launch will impact the overall brand equity of the
Oneplus Smartphone present brands and products. For example often launching a no
frill product may end up impacting the image of the company as an innovator in the
field. This is one of the reason why Apple stopped selling its plastic phones as it
negatively impacted the image of the company as a deliverer of superior hardware
products.
2. Does the product launch or product extension launch satisfy potential customer
needs and wants in a way that can deliver profits to the firm.
3. Will the product will be viewed completely different from the existing products
Pricing:
Pricing is a highly complex activity and we will cover only a very limited aspect of what
goes into pricing decisions. To a large extend pricing depends upon the other 3Ps of
marketing – product, place and promotion. Conceptually perceived value is the
maximum price a customer is willing to pay for Oneplus Smartphone product in the
given competitive context.
Cost Base Pricing
Under cost based pricing strategy – Oneplus Smartphone can work out what it takes to
produce the product and put a markup based on profit it wants earn. In a highly
competitive strategy with dynamic pricing the strategy may not be feasible. For example
Uber running losses in billions can provide lower prices and sustain compare to
individual taxi service provider who is not backed by private equity and long term
strategy.
Value Base Pricing
Value Base Pricing is a pricing strategy which is based on customer perception of value.
It inculcates put the number on both tangible and intangible benefits with a clear
understanding of elasticity of demand and competitive pressures.
Market Penetration Pricing
Oneplus Smartphone can employ this pricing strategy where it launch a new product
either at loss or at very low margin to get a foothold in the segment.
Market Skimming Pricing
For certain well established brands, Oneplus Smartphone can increase the prices as
customers can pay higher price.
Good Value Pricing
Offering right mix of product features, quality, and service combination at fair price. For
example offering a limited frill option - customers can have initial product experience at
an accessible price. GoPro use this strategy extensively.
Competition Based Pricing
The pricing strategy is based on the competition in the market. Under this strategy
Oneplus Smartphone focus is to match the prices of the competitors and focus on
reducing the cost of operations to increase profitability.
Pricing Recommendation
Based on the evidences at hand – we can choose the following pricing strategy
High Brand Awareness – The brand of Oneplus Smartphone is well respected in the
market so it can fetch a slight premium over the other competitive brands.
Innovative Product – With advanced features the product is perceived as innovative in
the current market context. A slight premium price will not only emphasize the features
of the products but also stops other players entering into the present segment. A high
premium price may attract new entrants and thus lower the profitability.
Place :
Place or Distribution Channel is a set of processes through which Oneplus Smartphone delivers
its products to the customers. Distribution & Marketing channels fulfill various purposes such as
– enabling product customization options at the point of sales, reducing purchase lot size thus
enabling opportunities for individual customers to buy products, providing extensive product
assortment using product line – breadth, length, and depth, logistics, providing product quality
assurance, easy availability of the products to end consumers , providing customers information
about the products ,and after sales services and installation services.
Promotion:
Promotion Mix or Integrated Marketing Communication strategy is a mix of various promotion
tools that are at disposal of Oneplus Smartphone. They are Advertising, Sales Promotion,
Personal Selling, Public Relations, and Direct Marketing.
Oneplus Smartphone can use all these five communication tools to persuasively communicate
to customer – existence of the product, price of the product, differentiating features of the
product, places where people can buy the products, and finally how consumers can effectively
use the products or services.
SWOT Analysis stands for – Strengths, Weaknesses, Opportunities, and Threats that Oneplus
Smartphone encounters both internally and in macro environment that it operates in. Strengths
and Weaknesses are often restricted to company’s internal - resources, skills and limitations.
Opportunities and Threats are factors that are analyzed in view of the prevalent market forces
and other factors such as social, health & safety, technological, legal & environmental, political,
and economic .
According to global executive survey done by Harvard Business Review & Brightline Initiative –
Only 20% of the strategic targets set by organizations are realized. Rest 80% of the strategic
targets are not achieved because of incomprehensive planning, limited resource allocation, and
poor execution.
The successful organizations such as Oneplus Smartphone are the one who able to predict
market trends better than others, provide resources to develop products and services to
leverage those trends, able to counter competitors’ threats, and meet customers’ expected value
proposition.
Opportunities Threats
Strengths Strength Opportunities (SO) Strategies
Using Oneplus Smartphone strengths to
consolidate and expand the market position.
Weaknesses Weakness Opportunities (WO) Strategies
Building strategies based on consumer
oriented product development and marketing
approach.
Strength Threats (ST) Strategies
Oneplus Smartphone can use two approaches - building on present strengths, or
analyze the trend and build processes to two pronged market penetration approach.
Weaknesses Threats (WT) Strategies
Oneplus Smartphone should just get out of these business areas and focus on strength
and threats box , or on weakness and opportunities box.