A Case Study On The Marketing Strategy Of OnePlus

Factors Contributing to Early Success

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.

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.

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 –

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.

1. B) Targeting the tech-savvy customers

Marketing Strategies

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.

1. 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).

1. 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 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.

1. 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.

1. 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.

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)

Targeting Tech Enthusiasts

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 · Strong presence in US, South Asian and Western Europe market · Huge potential in Australian market	Threats · 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) 

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.

Segment	Tech Enthusiast
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 · 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

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 these three segments. It can not only increase the customer base of OnePlus significantly but also would make the company an able competitor.

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-

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.

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.

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.

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.

Targeting Design Enthusiasts

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.

In order to recommend suitable strategies for OnePlus, an evaluation of marketing mix has been presented in this section

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 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.

Targeting Business Professionals

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.

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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Targeting Social Teenagers

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