GROUPWORK REPORT Principles of Marketing 1 2 GROUP MEMBERS Le Minh Thuy – BABAIU17156 Le Tran Lam Tra – BABAIU17164 Bui Diu Cam Tien – BABAIU17027 Ton Nu Hoang Uyen – BABAIU17081 3 4 HTC (High-Tech Computer Corporation), a Taiwanese consumer electronics company, is a known brand for manufacturing mobiles and tablets in the field of telecommunication. HTC started its operations in 1997 with the goal of bringing the power of computing into the hands of people around the world. The major turning point took place in 1999 when HTC entered the field of telecommunications. At present, HTC is one of the largest in terms of smartphones manufacturing in the world. Since founded till around 2011, HTC had remained one the strongest brand of mobile phones, especially in the market of Vietnam. However, from around 2013, HTC reported to have suffered a loss of $ 101.2 million for the very first time. From that point till now, HTC has been stuck with the smartphone market for years, gradually weakening. Although the company has launched many promising products, with unique technologies, everything seems to be against them and outcomes did not meet the company’s expectations. The market value of the company has fallen nearly 20 times since 2011, which to some extent, the value of the HTC up to this point may be considered to be worthless. In order to bring back HTC from its decline phase, the following analysis and marketing plan have been conducted and illustrated. 5 INTRODUCTION HTC (High-Tech Computer Corporation), a Taiwanese consumer electronics company, is a known brand for manufacturing mobiles and tablets in the field of telecommunication. HTC started its operations in 1997 with the goal of bringing the power of computing into the hands of people around the world. The major turning point took place in 1999 when HTC entered the field of telecommunications. At present, HTC is one of the largest in terms of smartphones manufacturing in the world. Since founded till around 2011, HTC had remained one the strongest brand of mobile phones, especially in the market of Vietnam. However, from around 2013, HTC reported to have suffered a loss of $ 101.2 million for the very first time. From that point till now, HTC has been stuck with the smartphone market for years, gradually weakening. Although the company has launched many promising products, with unique technologies, everything seems to be against them and outcomes did not meet the company’s expectations. The market value of the company has fallen nearly 20 times since 2011, which to some extent, the value of the HTC up to this point may be considered to be worthless. In order to bring back HTC from its decline phase, the following analysis and marketing plan have been conducted and illustrated. h t c 6 SWOT Analysis Strength of HTC HTC has an advantage in mobile phone industry over most top competitors that they have been manufacturing phones since 1997. They are the first corporation in the world, introducing 4G and 4G LTE smartphone. Moreover, HTC is well-known for the best overlay of Android OS which is added with HTC interface. Additionally, HTC has a strong association with industry leading players such as Apple, Microsoft, Nokia, Philips and Siemens technology giants who allow them to deliver innovative products, or leading telecommunication service providers in US, Asia and Europe who enable HTC to address large markets. Beside strong cooperation with large businesses, HTC also has presented strongly in global in some key markets like America, Europe and Asia-Pacific. One more thing is that HTC invests heavily for research and development. They have their own technology and R&D department to offer mobile phones. Therefore, products of HTC innovating every year with new ideas and unique customizable features, never repeat the previous phones. weakness of HTC is lacking their own OS and software. Recently, they are applying Google Android OS in their phones. As a result, HTC becomes dependent on third party of software providers. 7 SWOT Analysis Weakness of HTC Although HTC used to be the most popular mobile phone brand in the past, today some people don’t recognize this brand. Even They have seemed to disappear in Vietnam market. It’s because HTC is losing their market share to the giants of this industry like Apple, Samsung and some new Chinese brands such as Oppo, Vivo, Huaweii…. In addition, HTC has just focused on research and development and has not spent much on advertising and marketing of products, which has affected significantly on the sale of their mobile phones. This is a main reason that make them lose their competitors. Likewise, HTC has introduced various features in their smart phones every year, but they cannot get attention of customers. The reason is the specification of their products are not worth with the price that consumers have paid. Also, the design of their smart phones is still not unique, fashionable and not catching current trends to attract people purchasing. Because of high competition with some of the industry giants, HTC is subject to pricing pressure. They have reduced selling price of their cell phones, which leads to decline in revenue and difficulty in financial issues. The last weakness of HTC is lacking their own OS and software. Recently, they are applying Google Android OS in their phones. As a result, HTC becomes dependent on third party of software providers. 8 Opportunity of HTC Not just in Vietnam, most people in whole world these days has preferred touch screen cell phones. This market has grown rapidly every year and is expected to grow from six to eight percent in the next five year. HTC is engaged with producing these smart phones, so they should enhance the production of touch screen mobile phones with high quality applications as well as impressed designs. Furthermore, HTC has collaborated with Google and launched their products with Google Android OS installed in them, so this is an opportunity for them to increase the market. It also can be said that due to name of Google, HTC can base on it to expand their popularity. Additionally, Marketing is considered as an important factor that determines the development of any businesses. For this reason, to positioning their brand and rise the sales, the revenue, HTC should invest more in marketing and advertising for their smart phones. Besides that, they cannot ignore about offering additional services for customers who can contribute significantly to their revenue in the future. Nowadays, the demand for 4G-LTE in mobile phones is increasing strongly and is estimated to continue growing in the next years. And HTC has already introduced 4G-LTE smartphones to the market. This can be a good chance for them to benefit from that demand. Threaten of HTC HTC is the leader in Android using. However, Samsung is the most successful company in using this operating system. With rapidly changing technology, HTC needs to constantly innovate to be able to stand the competitive environment which requires investing heavily in R&D. HTC also has many competitors like Apple, Samsung,etc. The competition become more and more intense. Beside the technology innovation affect, it can put pricing pressure on companies to provide good quality product with competitive price. There are many commercial disputes in patent between HTC and Apple, Nokia. Many human and financial resources is mobilized for lawsuits. Last but not least, mobile phone company with cheaper technology and inferior quality of software can be dangerous for the sale of smart phones of HTC. Pricing pressures influence ASPs which in turn affects the operating margins for the companies. 9 STDP Analysis SEGMENTATION The market for any product is normally made up of several segments. And through these segmentations, the marketers can look at the differences among the customer groups and decide on appropriate strategies or offers for each group. Before 2017, HTC has been segmented based on mid- range market segment. While Apple and Samsung have dominated high-end segment, there is an intense competition with Chinese companies in mid- range segment market. Moreover, the lacking “unique selling point” and low margin profit require a change in orientate the market segmentation. To avoid the middle trap and reposition HTC brand, since 2017, the company decided to focus on close and high-end segment market with the opening of U- Ultra line. Therefore, HTC only launches 5-6 smartphones per year instead of running by number to increase the quality and experiences for exist and potential consumer. 10 STDP Analysis targeting Targeting the market involves assessing the attractiveness of each market segment and selecting one or more markets to penetrate. Businesses need to select their target market sensibly in order to devise appropriate marketing strategies for the chosen market. It is depended on the human and financial resources to select mass or individual marketing. This brand has targeted selective segment of the market of primarily young customers and first time/ savvy smartphone users. They also provide more services in the same package and at attractive prices. These multimedia features attract the youth as they are always concerned about having the latest trends. After that, although HTC targeted in higher-end and status quo customers to gain more benefit and built again the brand recognition, its products are well-designed for young generation which equipped dual speaker, selfie dedicated camera, etc. 11 DIFFERENTIATION & POSITIONING HTC is working on purely differentiation strategy targeting Niche marketing. HTC brought the mobile device industry to a new level by combining environment, video and personal assistant functions and embedded it into a device with high resolution, brilliant colors and multiple connectivity features. These features attract only specific class of people who know actually what they are taking. They hit those people who really know what he is taking. HTC faced many competitors in the market but became successful above all of them due to its highly differentiated strategies. HTC differentiation strategies were based on product designing, developing instinctive user interfaces and software implications and developing its own operating system. HTC fulfilled all requirements of the customers with increasing innovations in technology. The pursuit of innovation was reflected in the regularly updated product lineup. HTC gave whatever customers want. HTC was following the policy “Be the first one, get the maximum out of it”. As differentiation is related to uniqueness perceived by the customer. Customers would pay a premium price for a meaningful, perceived difference in the product/service. 12 HTC U12+ - “Live on the Edge” special features TAP, HOLD, SQUEEZE Double tap can get an adjustable mini screen that puts everything in thumb’s reach A simple hold can keep the screen the way you want. No more annoying and unnecessary screen rotations or dimming. Simple squeeze to take photos, launch voice assistants and bring up Edge Launcher. Do things faster, better even more one-handed convenience AR STICKERS Stick on fun Spice up photos and videos by adding funny 13 effects and playful AR stickers in real- Dual cameras. Front and back AUTO FOCUS Enjoy unprecedented levels of details and clarity in just about any condition and even when your subject is on the move ZOOM 2x optical zoomvi and 10x digital zoom allow you to focus on the action and details like a pro BOKEH Offers our most natural, artistic and captivating soft background effect yet. It’s like bringing a professional studio HDR BOOSTS 2 Clearer photos when the lights are brights or low 14 15 PRODUCT Substitute products of Smartphone are those technology productions, such as laptops, netbooks, PDAs, and tablet PCs. However, the power of the alternatives is low because those technology productions just have individual function in terms of substitute productions. Furthermore, Smartphone do wide variety functions, such as work everywhere via Wi-Fi network or GSM network, and Global Position system. Most importantly, people can access the company data anywhere and anytime via Smartphone without miss a beat wherever they are. Nowadays, all features and conveniences which Smartphone have could against the functions of the laptops, PDAs, and even GPS (Hill F., 2008). Product innovation is always the important part of industry life. Customers always want to have the new and efficient products and industry always need to develop and innovate the products that meet the customers’ needs. In the mobile phone industry, People used to use the mobile phone as oral communication. After that people start to use the mobile phone to memory some of the data such as pictures, songs, phone book and address book. Mobile phone was becoming a small personal memory book. Now mobile phone is also called as Smartphone that combine with operating system and become very small PC in your pocket. Smartphone can be use as GPS, access the internet, download, games, and translate language. Therefore, the Smartphone industry should be always considered innovation as primary objective. (HTC Corporation, 2009). HTC products are so familiar with every people that it can be used even by a new purchaser without any guidance and help of other. No user ever complaint regarding operating their products and this makes their strength to dominant the market (Ferrell and Hartline, 2010). HTC is just limited to their high-level segment. Means the phones they are producing targeting only to the high-class people or status quo people. They are not trying to capture the segment of upper middle class or middle class PRICE HTC quote their price so high and result of this only few peoples are can able to buy HTC products. So it is recommended to HTC that for other level of people they must quote price as per their purchasing power. This high price proprietary system is one of the weaknesses of HTC. 16 place In this category, it is important that the HTC products are located where it is easy for the targeted customers and also potential customers to access. As stated in latest speeches of HTC’s vision in the future, HTC has eliminated medium-quality, low-quality products and mostly focused on the premium ones instead, aiming at the young working people who are sophisticated and elegant, which are the similar attributes that the HTC phones have. To easily approach this target customers, HTC showrooms and stores should be located in the centers of the cities, for example like district 1 or district 3 in HCMC, or maybe near by the universities, colleges, office buildings, cinemas, or in shopping centers. These are the places where a majority of people who are the right kind of customers that HTC has targeted to usually go by, like students, office workers and other young people. As can be seen on the HTC website, there is only 1 showroom, located at number 1, Cong Truong Quoc Te street, District 1, HCMC, and 3-4 stores for the entire country, which mostly take care of warranty and other support. Comparing to the number of Oppo’s stores – one of the most popular phone brands nowadays in Vietnam with approximately 55 stores, we can see that HTC has not given much attention and effort in expanding their stores and locations to reach to customers. Moreover, cooperating with other popular distribution channels is also an effective way for HTC to expand their location and frequency of appearance to their customers. People usually go to specific electronic stores, which are stores consist of many brands of electronic devices, to buy a product. For example, in Vietnam, most of the people would definitely go to Thegioididong, Dienmayxanh or Nguyenkim to find the information or choose if they want to buy a new mobile phone. Therefore, working with these retailers helps HTC to improve its distribution process. For this strategy, HTC has already accomplished but still need to be more adaptive with many new electronic stores in the future. In many cases, ‘places’ are not limited to only ‘real’ locations where customers can directly or make the purchase in person. Recently, a lot of people have switched to online shopping, making online transactions. As a result, it is important that HTC copes with this trend, providing more online services and convenience for customer to buy its products not only through its home, traditional websites but also from e-commerce websites such as Tiki, Lazada and Shopee. A lot of brands, from 17 cosmetics, house furniture to electronic devices, have chosen this form of ‘place’ due to its effectiveness, cost-saving and time-saving. Promotion includes elements like: HTC can emphasize and truly show the advertising, public relations, social media special features of its products, or even marketing, email marketing, search engine with emotional videos to arouse people’s marketing, video marketing and more. This feelings, making people have good category is one of the main reasons why impressions and opinions related to the HTC has fallen behind compared to other brand. Not only creating a good marketing brands in these current years, particularly video, HTC must also make sure to work in Vietnam. closely with social media sites such as For the case of HTC, although HTC has Facebook or Youtube, because these are stated clearly that its products are made where a lot of ads are run and it is easy to for young people who are sophisticated, get these commercials and messages to elegant, etc, but they have not expressed customers. those attributes much through promotion, The third and final to promote HTC’s advertising to make the impression on products is to have the influencer - the customers that HTC phones are really that person who represents HTC and share elegant, intelligent with AI, ‘designed for similar characteristics with the products, you, work for you’ and exclusive functions have huge impacts on young people and which no other brands has. have the ability to persuade and make There are three main ways that HTC can them follow. Taking Apple as an example, apply to spread their names. The first is to one of the reasons why Iphone has been get more involved in sponsoring popular, such a popular product for its simplicity, famous events, and TV shows, reality smart, innovativeness is because the image shows. Taking OPPO as an example, OPPO of Iphone is attached to the image of Steve has significantly been one of the main Job – a simple, modern and intelligent sponsors for The Voice Kid, The Face, The man. Applying this strategy to HTC, sticking Remix, etc. It should be mentioned that a the product to an intelligent, elegant lot of young people, as we discuss earlier is person, take him/her to be the the target customers of HTC, watch and representative of the brand is a good way highly participate in these competitions to promote HTC mobile phones. Moreover, and shows. Therefore, if HTC can learn to it is also possible that HTC can take capture what the young people are into advantage of the spread of online creators, and usually spend time on, HTC can raise youtubers in specific to promote the HTC brand awareness in all key markets products. Brands nowadays send samples, and make its brand familiar with sponsor youtubers’ videos so that they can customers. share their opinions to viewers, spread the The second and also the most effective names of the brand and the products to way is to make marketing video, in which many people. promotion 18 References Adam, (2010, June 4). HTC corporation SWOT analysis. Retrieved from https://www.freeswotanalysis.com/telecommunication-companies-swot-analysis/57-htccorporation-swot-analysis.html Ansuya Harjani, (2012, 25 May). Why HTC Is Losing ‘Relevance’ in the Smartphone War. Retrieved from https://www.cnbc.com/amp/id/47562020 Faizul, (2017, August 29). SWOT analysis of HTC corporation. Retrieved from http://www.gotabout.info/swot-analysis-of-htc-corporation/ Get up, HTC. (2015, August 12). Retrieved from http://ttvn.vn/games/dung-len-nao-htc72015108204532732.htm Hai Dang, (2017, June 6), HTC “né” Samsung, Apple tại Việt Nam và hướng đi cho các hãng mới. Retrieved from http://www.brandsvietnam.com/12549-HTC-ne-Samsung-Apple-taiViet-Nam-va-huong-di-cho-cac-hang-moi Haseeb, (2015, November 18). SWOT analysis of HTC. Retrieved from http://marketingdawn.com/swot-analysis-of-htc/ Hitesh Bhasin, (2018, May 6). Marketing Strategy of HTC. Retrieved from https://www.marketing91.com/marketing-strategy-of-htc/#Segmentation-targetingpositioningin-the-Marketing-strategy-of-HTC HTC Corporation Analysis – Competitive Analysis and Swot from Answers Ltd - https://www.ukessays.com/essays/marketing/htc-corporation-is-asmartphone-manufacturer-marketing-essay.php Ngo Minh, (2018, July 4). HTC: Collapse of one big smartphone brand. Retrieved from https://news.zing.vn/htc-su-sup-do-cua-mot-ong-lon-smartphone-post857284.html Phuong Thao, (2018, Aug 3). Chiến lược STP là gì? Vai trò của STP trong Marketing doanh nghiệp. Retrieved from https://marketingai.admicro.vn/chien-luoc-stp-la-gi-vai-tro-cua-stptrong-marketing-doanh-nghiep/ Supply Chain Research Articles http://javedaslam9.blogspot.com/2015/02/cost-leadership-differentiation-of-htc.html Thanh Duy, (2017, January 29). CEO of HTC Vietnam: ‘Crisis help us to look back at ourselves’. Retrieved from https://news.zing.vn/tgd-htc-viet-nam-khung-hoang-giup-chungtoi-nhin-lai-minh-post714817.html Why online shopping has become a trend. (2015, April 10). Retrieved from https://www.sapo.vn/blog/vi-sao-kinh-doanh-online-dang-la-xu-phat-trien/ Website of HTC in US https://www.htc.com/us/ 19 GROUP CONTRIBUTION EVALUATION Names Leader: Rating Signature (5) very good (5) very good (5) very good (5) very good (5) very good 20