# BU5502 Case Study - OnePlus
###### tags: `BU5502`

## Abstract

### Challenge
Broadening the appeal of OnePlus to address the mainstream market without alienating its core customer base.

### Three Questions
1. what segment to target?
2. what value proposition and positioning strategy for new target customers?
3. what strategy to best use of limited financial resources?

### Key consideration
Stay true to the company's culture and mission ("Never Settle") and not emulate competitors.

## Background

### Case
1. how to sustain the advantage on price and performance?
2. how to "cross the chasm" between technology enthusiasts and the pragmatists?
3. how to transit from social-media marketing strategy to mainstream marketing strategy, given the limited financial resources?

### Company Background

- Motivation: "Available devices were just not good enough. People are only focused on adding features, not making good products."
- Early advantage: build a global brand with a global team. 85% of the sales from outside China.

### The global smartphone industry in 2015

- Most influential company: Apple, Samsung, Google.
- Apple: dominate the premium smartphone market
- Samsung: volume leader
- Google: dominate the operating system by Android

- Emerging economies
- e-commerce
- Xiaomi and Huawei aim the international markets
- India is the most growth potential due to the low smartphone penetration

- Trends of smartphone market
- bigger screens
- the rise of 4G
- cheaper handsets

### Products

- OnePlus One
- high-quality build, fast processor, excellent display, and attractive price
- sold exclusively on OnePlus website
- obtain an invitation to purchase the phone (from existing customers)
- because of limited supply
- create an exclusive perception
- receive criticism

- OnePlus 2
- "flagship kill" (receive doubts)
- continue good design, hardware, battery life, and user interface
- fall short on display resolution, NFC, and quick-charge capability
- "We misjudged what our main market was and went mainstream too prematurely. We should have stayed loyal to our core users."
- "we need to find the correct positioning for our phones"

- OnePlus X
- elegant design and high-quality hardware
- sacrificed performance to achieve affordable price
- swappable back covers
- also require invitation to buy

## Competitors

- 84% of the customers consider another Android device
- A few people consider Apple iPhone, Xianmi, or Huawei.

### Google
- Nexus more expensive but less capable
- Nexus has more advanced Android operating system

### Apple
- sleek design, premium-price
- loyalty among customers for excellent user experience
- OnePlus's emulating objective
- "Truly passionate about design"

### Samsung
- the largest manufacturer of mobile phones by volume
- Bad performance of Galaxy S5, but won praise for Galaxy S6

### Xiaomi
- offer flagship features at a very low price
- not a core competitor for OnePlus in US and Europe, but compete in India

### Oppo electronics
- world thinnest smartphone
- put in commercial products in the near future
- mostly competed with OnePlus in Asia, not US or Europe

### Huawei
- forefront in the rise of Chinese smartphone brands

## OnePlus's early strategy
- determination to place customers at the center of its decisions and activities
- open culture to build an international brand
- rely heavily on social media
- all redirect traffic to OnePlus's website
- Poke fun at its competitors
- "Smash the Past": destroy their smartphone to win OnePlus phone
- controversial
- draw fans and critics alike
- "Ladies First": draw OnePlus logo on women's bodies
- negative reaction
- many fans called it degrading
- pulled within four hours
- Ran contests and giveaways
- attract more than one million entries
- more than 40,000 new fans and followers
- OnePlus 2 stands global display
- cause Apple-like phenomenon

### Strategic Challenges
- sustainability: "flagship killer" cannot last long
- broaden the audience: "...maybe not the mass market, but maybe people who care more about the design of a product"
- questions
1. what segments should OnePlus address
2. how to adapt its value proposition and positioning strategy for the new market?
3. how should go to market in terms of distribution and marketing communication?

### Target Audience and Persona

#### early TA
- 14-25 years: use social media a lot
- 26-35 years: greater ability to buy the phone, use phone for everyday activities
- reason to buy: impressive feature ($>50\%$), attractive price ($38\%$), and design ($6\%$)
- $58\%$ not buy from the website
- feeling: stands for quality, excitement, innovative and impactful spirit, but short of being trustworthy, transparent, and customer-centric
- mostly male, highly educated, grown up with electronic device and internet.
- regular online shoppers
- students or worked in white-collar position
- update phone information all time, good understanding of smartphone
- willing to sacrifice elegant design

#### segmentation
- segment by behavior and motivation
- people who pursue a more authentic lifestyle that had less to do with outward looks and more to do with inner substance and beauty

#### Personas

### Value Proposition and Positioning
- performance
- continue the "flagship killer" by innovating on cutting-edge features and offering a compelling price
- sustain differentiation by creating "golden feature"
- OnePlus 2 is wording on this direction
- difficulty: not simple to sustain a innovation
- design
- "apple of the android universe"
- difficulty: lack the brand image like Apple or Samsung
- total customer experience
- difficulty: exclusive reliance on online sales
- the current response system received complaint

### Marketing Strategy for Main stream Customers
- pure online and social media is enough for early adopters but not mainstream customers
- considering more traditional marketing strategy