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Oneplus: Crossing the Chasm in the Smartphone Market

Essay by   •  April 28, 2019  •  Case Study  •  1,623 Words (7 Pages)  •  1,263 Views

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OnePlus: Crossing the Chasm in the Smartphone Market

As of now, OnePlus has catered to a relatively small tech-savvy market characterized by a high willingness to experiment. As the company has built a substantial base of early adopters, it is attempting to make a transition to a larger customer base. Crossing this chasm constitutes a challenge, as the firm has to make changes to its marketing mix “without alienating its current customer base.” On the one hand, OnePlus must design and market its devices in a way that preserves the core elements of its strategy that made it successful. On the other hand, modifying some aspects of its strategy is crucial for market expansion.

One of the main trends shaping the smartphone market is the success of cheaper devices.

But due to other trends such as larger screens and 4G capability, manufacturers may incur additional costs that result in higher prices. OnePlus’ ability to offer desirable features without compromising prices is reflected by its value-focused “Never Settle” slogan, which greatly contributed to the firm’s success. Additionally, the company used an invite-only model to sell its devices, which contributed to the products’ popularity by positioning ownership as a privilege. Currently, customers perceive OnePlus as a “young” brand that stands for “quality and excitement and an innovative and impactful spirit.”

As OnePlus seeks to transition to the mainstream market, its market offering should

satisfy the needs of a wide range of customers. With the release of the OnePlus 2, the firm focused on aspects of the product that were valued by a mainstream audience. The device was outstanding in terms of “design, hardware, battery life, and user interface.” However, the company faced backlash because of the lack of new technologies like NFC and quick-charge capability. This poor reception can largely be attributed to the tech-savvy customer base that the company had at the time; these customers were more likely to complain about features that most people would not use. But now that OnePlus is attempting to cross the chasm, it might be better off focusing on widely desirable features at the expense of more cutting-edge ones. This, along with low prices, would reinforce the company’s slogan.

The backlash that the company faced with the OnePlus 2 also points out the need for a

new marketing communications plan. Even though the company’s tech-savvy brand advocates were helpful in spreading awareness and creating demand, they may not be as effective moving forward. On the contrary, they may act as an influential vocal minority that draws attention to the lack of features that are not part of OnePlus’ value proposition. Additionally, OnePlus’ distribution model should also be adapted to the mainstream market. The invite-only model was effective in building awareness, interest, and desire. Now that substantial demand has been generated, an overhaul of this distribution model is essential to drive purchases.

OnePlus should start by determining the market that it will target in order to expand its customer base. Baby-boomers are technology-averse. Additionally, even though they seem to account for 20% of the market, only 64% own smartphones, which makes the demographic too small for expansion. A similar situation is observed in social teenagers, who account for 20% of the market, with 70% owning smartphones. If price is a factor preventing a significant part of the remaining 30% from buying smartphones, OnePlus’ aggressive pricing could give it a competitive edge. However, other factors may make pricing ineffective, such as parents simply being reluctant to the idea of their child owning a smartphone. Design enthusiasts make up 15% of the market, which might also be insufficient. Business professionals account for 30% of the market, which gives OnePlus more room for expansion. This market mostly uses Android smartphones, which makes for a smooth transition to OnePlus devices for customers. Furthermore, many of the competitors’ Android devices offer features that business personals do not need, as this market primarily uses technology for productivity. By offering a product that lacks unnecessary features and performs remarkably well on key ones, OnePlus could offer a compelling value proposition by satisfying customer needs at an aggressive price.

The firm would market a no-frills smartphone that is by no means low-end. Thanks to the overlap between the features valued by business professionals and the mainstream public as a whole, OnePlus would gain a competitive edge with a device that is outstanding on the features that are the most widely valued while omitting aspects that matter less in the eye of the mainstream consumer. The exclusion of less important features would enable OnePlus to maintain low prices and deliver superior value.

Given this approach to its value proposition, the company cannot compete effectively on performance, as “breakthrough features” have yet to obtain

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