Marketing plan for Lenovo cell phone from 2012 to 2014

Marketing plan for Lenovo cell phone from 2012 to 2014

Executive summary

With the fast development of telecommunication industry in China, the strong advantages of the monopoly situation in the technology aspect for those European companies don’t exist anymore.

For Lenovo, which owns the rich background with information technology due to its personal computer making background, the joining in of mobile phone making industry is the good choice for Lenovo to enlarge its brand influence and gain more market share in Chinese market even the international market.

Under a relatively thorough marketing investigation, in this project, we’ll offer a marketing plan for Lenovo mobile phone to better expand its market in China.

Content

1.0 Introduction 5

2.0 Situation analysis 5

2.1 Market analysis 5

2.1.1 Market size and share 5

2.1.2 Market potential and trend for Lenovo 6

2.2 Customer analysis 7

2.2.1 Purchasing intention and behavior analysis 7

2.2.2 Potential customer analysis 9

2.3 Competitor analysis 10

2.3.1 General information 10

2.3.2 Market situation of major competitors 11

2.4 PEST analysis 12

2.4.1 Political and legal environment 12

2.4.2 Economy environment 13

2.4.3 Social and cultural factors 14

2.4.4 Technology 14

2.5 Distribution analysis 15

3.0 SWOT 15

3.1 Strengths 16

3.2 Weaknesses 17

3.3 Opportunities 18

3.4 Threats 19

4.0 Missions and objectives 19

4.1 Mission statement 20

4.2 Product objective 20

4.3 Market share and financial objective 20

5.0 Strategies 21

5.1 Target market 21

5.2 Position strategy 21

5.3 Marketing mix strategies 22

5.3.1 Place strategy 22

5.3.1.1 Registered stores for mobile phone and the home appliance chain stores. 23

5.3.1.2 Enriching the place strategy 23

5.3.1.3 Online delivery strategy 24

5.3.2 Product strategy 24

5.3.2.1 Medium level product quality and fashionable appearance strategy 25

5.3.2.2 Modern production quality strategy 26

5.3.2.3 High quality after sale service 26

5.3.3 Promotion strategy 27

5.3.3.1 Sponsoring big events 27

5.3.3.2 Giving charges as gift 27

5.3.3.3 Promotion on the certain period of festival 28

5.3.3.4 Discounting strategy 29

5.3.3.5 Advertisement strategy 29

5.3.3.6 Bundling promotion strategy 30

5.4 Price strategy 30

6.0 Budget for the next three years 31

7.0 Projected profit and loss statement 32

8.0 Action program 33

9.0 Control & feedback 33

10. Conclusion 34

11.0 Reference 36

Figures

Figure 1 Customers’ purchasing preference on mobile phone……………………….. 8

Figure 2 Survey results on brand loyalty of mobile phone purchasing ………………9

Figure 3 characteristics of potential customers………………………………………. 9

Figure 4.0 Competitor analysis………………………………………………………11

Figure 5.0 Economy ratios for China during the 2000s……………………………13

Figure 6.0 Lenovo mobile phone’s SWOT in China…………………………………15

Figure 7.0 Marketing budgets of Lenovo mobile phone products from 2012 to 2014 ………………………………………………………………………………….31

Figure 8.0 Profit and Loss Statement of Lenovo mobile phone products from 2012 to 2014…………………………………………………………………………………. 31

Figure 9.0 Implementation schedule for Lenovo from January to December 2012 …………………………………………………………………………………32

1.0 Introduction

Lenovo Corporate is the Chinese domestic enterprise which is engaged in personal computer making. While in recently, it begins to explore the mobile phone manufacturing industry. Under the lead of its president Liu Chuanzhi, Lenovo plans to maintain its prosperity in the mobile phone industry following its success in personal computer making (Xie & White 2004).

In this paper, we’ll explore its marketing plan to better understand this Chinese domestic enterprise.

2.0 Situation analysis

2.1 Market analysis

2.1.1 Market size and share

As the biggest giant in the information industry of China, Lenovo has been trying to enter the mobile phone manufacture industry since 2002 to continue its market myth. To begin with, let’s have a look at the market size of the Information Technology and Telecommunications Industry of China, which are the major consumption groups of mobile phones in China (Xie & White 2004).

According to the statistics from Ministry of Information Technology and Telecommunications of China, it indicates that the total revenue of Telecommunication Industry was about 431.1 billion in 2011 during the period from January to September, which is increased 4.2 % compared to that of 2010. And during the different categories of the telecommunication industry in China in the year 2011, the total revenue of China Mobile was bout 193.19 billion, increasing 16.9% than 2010, which takes up 44.8% of the total revenue of telecommunication industry. Moreover, the new customers of telephone and mobile phone were about 77,119 in 2011, half of which was the new mobile phone users. (Murphree & Breznitz)

And also during last year, the total investment of telecommunication industry of China was about 122.61 billion, which was mostly contributed by the east region and middle region (Wen 2011).

Generally speaking, the market size and potential of China for mobile phone manufacture industry is great, which is full of chances for Lenovo to take part in.

2.1.2 Market potential and trend for Lenovo

Biediger et al. (2006) mentioned, in the entire mobile phone making industry of China, the overall condition for those mobile phone makers is optimistic. While as the launching period of different brands may differ from each other, the mobile phones from different brands may be at different stage of their own life cycle.

The mobile phone products of Lenovo have been enjoyed a growth rate since the April of 2002, whose market share has steady and which is at the mature stage in its life cycle.

But for Lenovo mobile phone, due to its inactive marketing, its sales performance isn’t so satisfactory. From the standing point of Lenovo, its mobile phone products are regarded as new for the mobile industry of China, which is not only from its mobile phone products’ launching time length but also from customers’ ideas. Hence, from these aspects, we may further regard Lenovo’s mobile phone products is just at the introduction stage, which asks for proper marketing plan to broaden its market. In a word, the proper marketing plans especially the marketing promotion strategies are so important for Lenovo (Chen 2005).

2.2 Customer analysis

2.2.1 Purchasing intention and behavior analysis

At first, according to the research from Li, Chen and Hshiung (2010) on customers’ purchase behaviors on mobile phone products the purchasing preference of Chinese customers are as the requirements in figure 1.

Figure 1 Customers’ purchasing preference on mobile phone

Age group High quality camera Power word software Group message function High capacity Various games High sound quality others
15-20

20-25

25-30

30-40

40 above

Total 32% 33% 31% 24% 20% 25% 10%

Source: Li, C. Chen, C.W. & Hshiung, G. 2010, Planning the development strategy for the communication package based on consumers’ choice preferences, Elsevier B.V., vol. 37,

Secondly, in the preference of promotion measure investigation aspect, 26% customers prefer the promotion strategy of mobile phone fee refunding method, 16% will be attracted by the prize inside promotion method, 13% customers prefer the promotion method of the same price but more additional accessories and 11% prefers the discounts promotion method (Li, Chen & Hshiung 2010).

Thirdly, in the purchasing frequency and time research on mobile phone purchasing, Li, Chen and Hshiung (2010) told us most of the customers prefer to purchase mobile phone on a certain day such as the weekends or festivals and most of the customers purchase mobile phone every two to three years.

At last in the survey on customers’ brand loyalty, we have the following results according to Sheng (2012).

Figure 2 Survey results on brand loyalty of mobile phone purchasing

Customers Choosing the brand already before purchasing Not choosing the brand already before purchasing Depending on the actual situation to purchase the brand
Female

33%

27%

40%

Male

25%

30%

45%

Average

30%

29%

41%

Source: Sheng, M.L. 2012, Product attributes and brand equity in the mobile domain: The mediating role of customer experience, International Journal of Information Management,

From the result from figure 2, we can find that the brand loyalty of Chinese customers on mobile phone purchasing is relatively weak, which can be taken advantage of by Lenovo to promote its mobile phones to more customers in China by building stronger brand loyalty via suitable marketing strategies.

2.2.2 Potential customer analysis

On the basis of the research from Fan (2010), we find out there is a certain ground of potential customers on mobile phone purchasing for Lenovo which is summarized in the following figure.

Figure 3 characteristics of potential customers

Age group

General Information

Occupation

Income

Education Background

Around 20 Independent life without independent family Medium to high level Medium to high level Medium to high
Around 45 Single life Medium to high level Medium to high level Medium to high

Source: Fan, P. 2010, Developing innovation-oriented strategies: lessons from Chinese mobile phone firms, International Journal of Technology Management, vol.13,

Generally speaking, this potential group of customers is keen on purchasing high quality life without high brand loyal when purchasing mobile phone’s brand.

2.3 Competitor analysis

2.3.1 General information

According to Shi and Wildman (2010), in the mobile phone industry of China, the foreign brands are mainly Apple, Nokia, Motorola, Samsung, HTC, LG, Black Berry, Sony Ericsson, Siemens and so on. And the popular domestic brands for mobile phone brands are these brands including Sharp, Tianyu, Lenovo, Chang Hong and Bird and so on.

Generally speaking, these foreign brands take up the largest market share of mobile phone sales, which are regarded as the major purchasing stream. And these popular domestic mobile phone brands only enjoy a low level of reputation compared to these foreign brands.

2.3.2 Market situation of major competitors

Based on the marketing performance of those major mobile phone brands in China from Zhu et al. (2012), we can find the major rivals of Lenovo’s mobile phone are Samsung, Nokia or Blackberry and Sony Ericsson, whose target customers are females, business people and students respectively.

And figure 4.0 is the competitor’s analysis for Lenovo in China.

Figure 4.0 Competitor analysis

a) Low price products comparison

Category

Function

Price (RMB)

Sony Ericsson Z530C Basic functions 999
Motorola W375 999
Nokia 6080 1,070
Lenovo V727 1,050
Samsung SGH-X208 780

Source: Sohu.com.cn.

b) High price products comparison

Category

Function

Price (RMB)

Sony Ericsson w950i Upgrade functions with many fashionable soft wares 2,250
Motorola E6 2,889
Nokia 5700 3,150
Lenovo LPhone 2,990

Source: Sohu.com.cn,

2.4 PEST analysis

According Elliott, Rundle-Thiele and Waller (2010), the macro environment for an organization including the factors such as political and legal factors, economy factors, social and cultural factors and technology factor, which have great influence on the survival and development of the organization.

2.4.1 Political and legal environment

According to Deng, Lu and Wei (2010), in China, its central government always insists the policy to support the development of those domestic industries with favorable policies such as the tax policy, the low interest on bank loans policy and other favorable policies. For Lenovo as the Chinese domestic industry, it has the good political environment to develop its mobile phone making industry in China.

Moreover, with the more and more developed condition of China, its legal environment become more and more sufficient and complete. For Lenovo as the domestic enterprise employing high technology into its products, this kind of legal environment is also a good point.

2.4.2 Economy environment

With the joining of WTO and well catching the trend of globalization, the economy status of China becomes stronger and stronger. In figure 4.0, we can find that the economy performance of China during the 2000s is good, which the increasing rate of several economic indicators such as the economy outcomes including GDP rate, FDI, trade to GDP ratio, labor market outcomes such as employment rate and unemployment rates as well as living standard for people including the poverty incidence and income inequity and so on, which is shown in figure 5.0 (Shuo2010)

Figure 5.0 Economy ratios for China during the 2000s

figure 5.0

 

And from figure 4.0, we can find that both the GDP and other economy ratio of China has been enjoying so good a developing speed that the consumption power of Chinese consumers become stronger than before. In another word, the capacity of Chinese customers on mobile phone purchasing is strong, which for Lenovo is so fantastic.

2.4.3 Social and cultural factors

In China, it has five thousand years history, which fosters the patriotism in the heart of most Chinese people with the influence of Confucius and Taoism. Hence, many Chinese people prefer to choose the products or brands which are made in China and with relatively good quality. For the mobile phone of Lenovo, it is also good news (Deng, Lu & Wei 2010).

2.4.4 Technology

Lenovo is the biggest computer manufacturer in China, which has been enjoying a good development speed. And especially after Lenovo has acquired the personal computer department of IBM, its competitiveness has been improved so much. In the the high technology products making such as the computer production and mobile phone production, Lenovo is experienced (Hu 2007).

Moreover, the technology development environment in China is also good, which under the support of both central government and local government (Hu 2007).

Hence, for Lenovo the technology environment for it to develop it mobile phone business is relatively encouraged.

2.5 Distribution analysis

There are diverse distribution channels for Lenovo to deliver its products to domestic consumers such as opening counters in these registered mobile phone selling stores and department stores as well as the household appliance chain stores and so on ( Lenovo 2011).

3.0 SWOT

According to Elliott, Rundle-Thiele and Waller (2010), the SWOT analysis is the certain kind of analysis, which can assist organizations to identify both the internal and external environments such as the strengths, weaknesses, opportunities and threats to smoothing its operation in the marketing place. For Lenovo, we will also analyze its marketing environments to assist it to further as figure 6.0 shows.

Figure 6.0 Lenovo mobile phone’s SWOT in China

Internal Factors

Favorable Unfavorable
Strengths Weakness
Good functions and high products quality

Strong financial competitiveness

Low reputation and small market share

Bad reputation of “made in China”

External Factors

Opportunities Threats
Potential target market including people about 20 and above 40

Good opportunity in student market

Fierce competition

Relatively bad economy situation in the global region including China

3.1 Strengths

According to the survey from Hu (2007) on the mobile phone market of China, we find that the strengths of Lenovo’s mobile phone are several. The first one is that these additional mobile phone softwares are so wonderful which are not only suitable for people to amuse themselves, studies and deal with financial matters but also with a cheap price, all of which are so fit for the requirements of Chinese consumers. And these entertainment tools such as the mobile phone camera, MP3 or MP4 players, and games and so on are also powerful.

Moreover, the strong financial competitiveness of Lenovo Groups endows Lenovo with the capability to outstand its mobile phone products via suitable promotion means. Because in the Chinese market, the launching time length of Lenovo’s mobile phone isn’t so long that the image or reputation of this products made by Lenovo doesn’t give customers deep impression, hence it is possible for Lenovo to catch this opportunity to intensify the marketing promotion on this high quality mobile phone products in Chinese market (Lenovo 2011).

3.2 Weaknesses

The first weakness of Lenovo’s mobile phone brand is due to its low reputation and relatively small market share. On the one hand, although the personal computer of Lenovo is very famous and owns high market awareness, the mobile phone brand only owns a short market history, whose name is brand new for customers. On the other hand, the strong competitiveness of other mobile phone brands especially these foreign mobile phone brands including Apple, Samsung, Nokia and Motorola have built deep impression on so many Chinese mobile phone buyers. Compared to those foreign brands, the competitiveness of Lenovo mobile phone is at the inferior position (Leng 2011).

The second weakness of Lenovo mobile phone is the notorious fame of some made in China products (Leng 2011). Although in the previous, we have pointed out the patriotism of Chinese people offers Lenovo brand as the Chinese national enterprise with its special strength. Some bad aspect of “made in China” products such as the poisonous milk power accident in China and those terrible quality “cheap copy” products including mobile phone products in China cover the many Chinese made products with black cloud in the mind of many customers all over the world including some Chinese customers in China. This kind of doubtful attitude of consumers on “made in China” products also a weakness for the Lenovo brand to promote its mobile phone products in China.

3.3 Opportunities

At first, as we mentioned above, the entire Chinese market is full of potential for Lenovo to attract so many potential customers. As figure 3.0 indicates there are two kinds of potential customers in the mobile phone market of China which can be defined as the target customers including the people who are above 40 years old and has been single with sound financial status and decent job in the society. And the other group is those around 20 years old, who are independent without marriage experience. This kind of target customers are rich enough and without strong brand loyalty in mobile phone purchasing. Hence for Lenovo, smart and suitable promotion means may be effective for it to attract the eyes of the two kinds of potential customers to make better performance in future (Lee 2011).

Secondly, with the more more and saturated trend of the mobile phone market in China, the requirement of customers become diversified, especially in the students market part, which for Lenovo is a good opportunity. For student consumers in China, they are lack of strong consumption power to afford high price products including mobile phone products. While in terms of Lenovo mobile phone, it is famous for cheap price, relatively high quality and function as well as relatively good appearance, which are just the especial designed mobile phone products for students. Hence, for Lenovo, the mobile phone market for students will be further enlarged in the future. Moreover, the existing student consumers don’t own strong brand loyalty toward some certain kind of mobile phone brand in Chinese market (Lee 2011). In a word, the student mobile phone market in China is full of potential for it to focus and catch that opportunity.

3.4 Threats

According to Lee (2011) research results, the first threat for Lenovo mobile phone is the fierce competition among mobile phone makers due to the great attractiveness of this huge market in China. The competition isn’t only in the price competition but also in the products function and appearance. The new market trend of the great popularity enjoyed by those smart phones is almost the first choice for consumers to choose when making up their purchasing decisions. While in this part of smart phone segmentation of China, it is almost monopolized by those foreign big brands including Apple, HTC, Nokia and Samsung, which for Lenovo to broaden its market of mobile phone is a great threat.

Secondly, the economy situation in the global region including China isn’t so optimistic, which also hinder the further development of this Chinese domestic enterprise to further develop its mobile phone products in Chinese market to a certain level (Lee 2011).

4.0 Missions and objectives

4.1 Mission statement

The market mission of Lenovo mobile phone is to offer customers the good quality product with the low price (Lenovo 2011).

4.2 Product objective

The product objective of Lenovo mobile phone is to diversify its mobile products categories and improve the products quality and function to reach the international advanced level as other foreign mobile phone brand do (Lenovo 2011).

4.3 Market share and financial objective

According to the marketing survey, the market share objective for Lenovo mobile phone products is to reach the 3.3% to 5% of market share in the Chinese mobile phone market to improve its reputation.

And based on the marketing research, for a large mobile phone store such as Gome, which is the biggest electronic and mobile phone selling shop in China, the monthly total sales quantity of mobile phone is approximate 3,000 pieces and the total sales revenues among three months are about 8.1 million. That is to say, the marketing objectives of Lenovo mobile phone in every large mobile phone selling shop is about 99 to 150 pieces about 0.09 million to 0.14 million monthly (Lenovo 2011).

5.0 Strategies

5.1 Target market

Based on the above analysis, the target population for Lenovo’s mobile phone products will be clarified into three aspects. The first target population is the people around 20 years old, who are independent and without family financial pressure. The second group is these people above 40 years old, who are single and with good financial status. Thirdly, this group is regarded as the major consumption population for Lenovo mobile phone, which is the student consumer.

5.2 Position strategy

Based on the survey from (Lenovo 2011), the position strategy for Lenovo mobile phone products will be focusing on the two major trends including the high technology development and comprehensive function aspect, which is also suggested by us.

At first, according to the requirements from consumers on mobile phone purchasing, there are two stages. The first stage is that customers prefer to purchase the mobile products at very convenient manner. And then after fulfillment of this kind of requirement, their requirements will be higher at purchasing the high technology aspect. Secondly, the pervious mobile phone product position strategy of Lenovo is inclined to the convenience part rather than high technology, which may only be suitable for the basic requirement for customers. That is the higher requirement of customers on high technology mobile phone products side, which isn’t seemed to be fulfilled by Lenovo in the past. To summarize, for these customers whom Lenovo set as target customers, the high technology position strategy is more suitable and attractive to attract these customers and build their brand loyalty (Lenovo 2011).

5.3 Marketing mix strategies

According to Elliott, Rundle-Thiele and Waller (2010), the marketing mix refers to the framework of different elements which are important for marketers to take into great consideration. To better implement the marketing plans for Lenovo mobile phone, there are several marketing mix strategies including the promotion strategy, price strategy, product strategy as well as the place strategy for Lenovo to well implement in the following.

5.3.1 Place strategy

According to Zhang , Hu, and Kotabe (2011), place strategy for an organization refers to making the products or services of the organization available to customers at the correct time and correct place. For Lenovo mobile phone’s place strategy, we have the following proposal.

5.3.1.1 Registered stores for mobile phone and the home appliance chain stores.

According the the survey of about the mobile phone market in the Guangdong Province of China, we find that the most popular selling channel of mobile phone including two ways such as the specialty stores for mobile phone and the home appliance chain stores. And most of customers in China are through the two kinds of means to purchase mobile phone products. And most of these stores are chain stores which own relatively good reputation and credit, which become the most important reason for customers to buy mobile phone through these channel.

For Lenovo mobile phone, both the special stores for mobile phone selling and the household appliance chain stores will the primary choice for Lenovo to deliver its mobile phone products to customers in this period’s marketing plan from 2012 to 2015, which is predicted to contribute this kind of place channel in the future too.

5.3.1.2 Enriching the place strategy

Based on the research of Zhang , Hu, and Kotabe (2011) on Lenovo, the place strategy of Lenovo mobile phone brand is also concentrating on the enrichment of product selling channels. As the above mention, Lenovo has been insisting on the maintenance of its distribution channels in the registered stores for mobile phone selling and household appliances chain store. At the same time, Lenovo is also engaged in the modification and perfection of these two channels. On the one hand, Lenovo has set up the special exhibition show shelf of its mobile products with special chosen clerks with the uniform of Lenovo to promote. And these clerks in Lenovo mobile phone counter has accepted special training programs, which makes the services from Lenovo mobile phone counter professional and considerate to customers.

On the other hand, the distribution tactics in different stores are different, which are based on the situation of different location. For example, in these stores around business circle region, the inventory of Lenovo mobile phone is often about 100 pieces, compares the piece about 30 round in these stores in economy less developed areas. And the distribution manner of Lenovo mobile phone is also flexible that all of the Lenovo mobile phones in different stores of the same city can be transferred to meet customers’ purchasing needs (Shuo 2010).

5.3.1.3 Online delivery strategy

According to the successful online direct selling experience of the personal computer brand for Lenovo, the mobile phone brand of Lenovo has also adopted such kind of distribution manner to make its mobile phone products better reach its customers in the Chinese market (Lenovo 2011).

As Hu (2007) mentioned, Lenovo has set up its online selling network in many online commercial platform including Taobao, Paipai, Ebay and so on to fulfill the requirement on these netizens in China at the largest degree.

5.3.2 Product strategy

Based on the above analysis, the target population for Lenovo is the people around 20 years old and the people above 40 years old as well as the student consumers. To meet the needs of these kinds of potential customers for Lenovo, the product strategy of Lenovo is aimed to build a certain degree of reputation and recognition in customers via special designed product strategy as the following description (Shuo 2010).

5.3.2.1 Medium level product quality and fashionable appearance strategy

Based on the marketing analysis from Liu (2007), Lenovo plans to go along the medium level product quality strategy to meet its major customers –the student customers’ requirement. According to the research on student consumer, we find that the most attractive points for student to make up their purchasing decision on mobile phone are the price and appearance. Because, this kind of group owns this obvious characteristic that the renewal frequency for students to purchase a new mobile phone is about one to two years which can be regard as a relatively high frequency. And for the life span of medium level quality mobile products, one or two years is long enough for it to afford the usage. Hence it isn’t necessary for Lenovo to product the mobile phone products with too high quality. The medium level quality mobile phone products are qualified for its target customers to make full use of.

Secondly, besides the product holding medium level quality strategy, in the appearance design aspect, Lenovo emphasizes the fashion, pretty, attractive and special to meet the requirements of student customers and these customers around 20 years old who pursue the uniqueness and fashion specialty on product design.

5.3.2.2 Modern production quality strategy

To maintain the strength on high techniques in mobile phone products production especially the possession with modern technology in mobile phone software design and innovation, Lenovo has established a special group which is engaged in new mobile products designing and production under the support of an experienced and full of innovation spirit group. And to endow the mobile phone products with modern technology to keep the pace with the international advanced level, Lenovo has also developed close relationship with many famous international brands to make its mobile phone products endowed with modern technology to be possessed with strong competitiveness (Liu 2007).

5.3.2.3 High quality after sale service

One of shining points of the personal computer products from Lenovo is its high quality after sale service, which has built good fame for this personal computer manufacturer brand in China. Based on this successful experience, Lenovo has also been insisting in the high quality after sale service on its mobile phone products. For actual implementing the high quality after sale service to its mobile phone customers, Lenovo has only involve this issue in its cultural building aspect but also involving it into the employee training programs to develop their employ quality with the full focus (Lenovo 2012).

5.3.3 Promotion strategy

To better improve the brand fame and build brand loyalty of Lenovo mobile phone brand, there are four kinds of promotion strategies employed by this brand.

5.3.3.1 Sponsoring big events

According to the annual report of Lenovo (2011), to sponsor some big events can be one of the most attractive means for a business to attract customers’ attention via the reputation of those big events. For Lenovo mobile phone, it chooses to sponsor the university or college big events such as the events to welcome new freshmen, New Year Party and other meaningful events. As the major target consumers of Lenovo mobile phone is the student population, the sponsoring of these big events in teaching and education sector is the most effective access for Lenovo to reach its student customers. And with the good cooperation with these events, it can deepen the impression of Lenovo mobile phone brand in the minds of student consumers.

And moreover, under the gradual influence of Lenovo mobile phone products during these big events, the purchasing behaviors of students will be influenced to a certain extent when they making up their decision on purchasing the Lenovo brand.

5.3.3.2 Giving charges as gift

The second promotion strategy for Lenovo to promote its mobile phone is to develop the cooperation with China Mobile Service Hall and China Union Mobile Service Hall to implement the strategy of purchasing the Lenovo mobile phone to get mobile phone charge based on the price of Lenovo mobile phone. For instance, if the selling price of Lenovo mobile phone is among 1,000 to 2,000, then the gift of mobile phone charge can be set at 100, and if the selling price of Lenovo mobile phone is 2,000 above, the gift of mobile phone charge can be increased to 150, and the rest amount of gifts can be given by such analogy (Lenovo 2011).

By this means, both the mobile service halls and Lenovo mobile phone can gain the win win results, which is the most suggested promotion strategy for Lenovo mobile phone to make use of.

5.3.3.3 Promotion on the certain period of festival

The third promotion strategy for Lenovo mobile phone is to make full use of these special dates such as the open day of each new term to attract students. For instance, the promotion methods Lenovo mobile phone used include the advertisement leaflet, propaganda banners and other methods to attract the target population’s attention. More specifically, the promotion campaign can be built up on the basis of the comparison of the price and function with other brands’ mobile phone products to outstand the advantage of the price and function of Lenovo products, which can give the impression that the same purchasing price but the better quality and function of Lenovo mobile phone compared to other brands to the customers. (Lenovo 2011)

5.3.3.4 Discounting strategy

The other most effective promotion strategy used by Lenovo mobile phone is the discounting strategy which for most of the products is the effective strategy.

Let’s take the student consumers for instance. Although many students can be engaged in some part time jobs, most of their living fee is from the support of their parents. Hence, using the discounting strategy to attract student consumers by the price advantage can be a good and effective strategy for Lenovo to attract the eyes of those certain kind of consumers and meet their needs too. (Lenovo 2011)

5.3.3.5 Advertisement strategy

The advertisement strategy employed by Lenovo mobile phone are also various. Firstly, the poster in the commercial circle to promote the Lenovo products is its first advertisement promotion strategy. The second advertisement means for Lenovo to promote its mobile phone brand is to use the TV advertisement, magazine advertisement or newspaper advertisements to reach a wider size of consumers with the well designed advertisements’ main idea and theme including the elements such as fashion, passion, vitality and sunshine. (Lenovo 2011)

5.3.3.6 Bundling promotion strategy

The last promotion strategy employed by Lenovo mobile phone is the bundling promotion strategy which bundle the sales of computer products with the mobile phone products. According to the current performance of Lenovo brand, the personal computer segmentation has a better performance and enjoys a better fame than its mobile phone products (Lenov 2011). Hence via the bundling mobile products with the personal computer products together, the popularity and sales performance of mobile phone products will be improved.

For example, with purchasing the personal computer at the price of 6,999consumers can get a Lenovo mobile phone worth 800 with an extra payment of only 500.

5.4 Price strategy

The price strategy of Lenovo mobile phone product is based on the relatively cheap price principle to attract the major target consumers namely the student consumers of Lenovo (Lenovo 2011).

On the one hand, most of the mobile phone products of Lenovo is at the selling price around 1,000 or so. Under such kind of cheap price, the consumers can also gain many extra gifts including the mobile phone charge.

On the other hand, for these VIP consumers or inside employees, the discount rate is about 8% to encourage the purchasing of these people which offer support for Lenovo’s mobile phone products.

6.0 Budget for the next three years

The marketing budget for Lenovo to promote its mobile products in Chinese market is also important for the success of this brand. In figure 7.0, it is the marketing budge for Lenovo mobile phone products from year 2012 to 2014.

Figure 7.0 Marketing budgets of Lenovo mobile phone products from 2012 to 2014

Period Ads fee Training and motivation Expansion fee for distribution

channel

Maintenance fee for distribution channel Improvement fee on online selling platform Maintenance fee on on online selling platform Public relation R &

D

Total
2012 33,000 6,000 4,000 3,500 4,000 15,000 6,000 25,000 96,500
2013 40,000 6,000 5,000 4,500 4,000 15,000 5,000 30,000 109,500
2014 55,000 6,000 6,000 5,500 4,000 15,000 6,200 35,000 182,200

In thousands (CNY)

Source: Lenov0, 2011, annual report

7.0 Projected profit and loss statement

Figure 8.0 Profit and Loss Statement of Lenovo mobile phone products from 2012 to 2014

Items Period Thousands CNY Total Thousands CNY
2012 2013 2014 2012 2013 2014
Total sales 3,200,000

110,600

3089400

1,500,050

142,300

1357750

1,560,436

215,440

1344996

Ads 33,000 40,000 55,000
Training and motivation 6,000 6,000 6,000
Expansion fee for distribution

channel

4,000 5,000 6,000
Maintenance fee for distribution channel 3,400 4,500 5,500
Improvement fee on online selling platform 4,000 4,000 4,000
Maintenance fee on on online selling platform 10,000 8,000 8,000
Public relations 6,000 5,000 6,200
R&D 25,000 30,000 35,000
Tax 21,000 21,800 23,000
Other expenditures 12,000 11,000 10,240
Total expenditures
Profit

In thousands (CNY)

8.0 Action program

Lenovo mobile phone brand will carry a series of promotion campaign to facilitate its business expansion in Chinese market to meet its business objectives from 2012

Figure 9.0 Implementation schedule for Lenovo from January to December 2012

figure 9.0

9.0 Control & feedback

To actual manage the well function of the marketing plan, Lenovo mobile phone brand will has four aspects.

At first, Lenovo plans to examine the achievements monthly or quarterly. And then, the management will double examine the business objectives of Lenovo mobile phone and carry out the modifications on the business objectives to make it more suitable and effective to fit the requirements of these target consumers (Zhao 2005).

Secondly, carrying out the emergent plans to deal with emergent situation to make the Lenovo mobile brand maintain the good reputation is the second step for Lenovo mobile phone to control and manage its marketing plan (Shuo 2010).

Thirdly, developing the flexibility inside its marketing plan and strategy via the effective and suitable training and developing programs to improve the flexibility and competitiveness of its marketing people.

At last, collecting the marketing feedbacks from customers of Lenovo mobile phone and these working employees to make the understanding about the market much clear and better are the last controlling measures of Lenovo (Shuo 2010).

10. Conclusion

Marketing is the certain kind of thoughts and a kind of philosophy, which is the most direct method for Lenovo to promote its mobile phone brand to its customers more effectively.

Lenovo mobile phone brand has made full use of its own strengths to maintain its good image as the national enterprise on the basis of proper designed marketing plans. We believe the future of Lenovo mobile phone in Chinese market will be promising.

11.0 Reference

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Shuo, S. 2010, The exploration of Chinese enterprise business model innovation path under overseas M&A boom——take lenovo group as a case study, Studies in Science of Science, vol.5, no.7,

Xie, W. & White, S. 2004, Sequential learning in a Chinese spin-off: the case of Lenovo Group Limited, Journal of R&D Management, vol. 34,

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Zhang, D., Hu, P., Kotabe, M. 2011, Marketing–Industrial Design Integration in New Product Development: The Case of China, Journal of product Innovation Management, vol.28, no.3,

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