The mobile phone handling is on the rise day after day and it is transforming the field of technology and people’s lives across the world. In today’s modern life; people spend considerable amount of time using mobile phone for various purposes. Thus making it the most wanted gadget that people use most frequently.
HTC is one of the biggest brands in mobile phone & telecommunications industry globally.
HTC has shipped around 32. 6 million unit of mobile phone accounting 4.6 % of the global market; placing the HTC brand as number 4 mobile phone globally in 2012. The Taiwan based company HTC caters mostly for the middle end segments. HTC has its presence in every segment of the market. It offers the cheapest of smart phones with the most basic features as well as high-end phones with all the latest features and was the first to introduce android. (http://htcsource. com/) The purpose of this assignment is to produce an outline with justification of HTC’s product market decision to the international business under the following topics.
What is international marketing? Firms entering international markets Researching international markets & emerging markets International marketing environment International marketing strategies of HTC Product & pricing strategies of HTC The marketing plan of HTC The marketing mix of HTC International marketing culture of HTC International marketing communication strategies This will help how HTC’s way fits in to the theories of International Business Marketing.
History of HTC
HTC Corporation (HTC) is a Taiwanese operation with the most part of being influential, creative and leading players in global telecommunications with an escalating influence in the industry’s future. HTC is the synonym of “High Tech Computers” it starts its operation in 1997 and has made a name for itself in the global market and has been identified as one of the fastest brand & technology growing in the field of mobile communication. HTC’s portfolio includes smart-phones and tablets powered by the Android software and HTC Sense operating systems (HTC Annual Report, 2010).
It has started marketing its mobile phones under its own brand name (HTC) since 2006. Founded by Cher Wang, HT Cho and Peter Chou, which also reflects their initials in the brand name, the company has been the runner up in several successful operator branded devices, with established close partnerships with key players in the operator dominated mobile markets in Europe and Asia. HTC’s products are the most flourished in the world at the moment and thus since it has launched its own brands which have registered the fastest growth rate in the History of HTC.
Its products are highly innovative & predictive of the future market trends, needs and demand with product range includes the full array of multimedia, wireless and web resources. HTC is related to the primary objective of most businesses entity which is profit maximisation. Surprisingly for many specialists of the mobile phone technologies; HTC has been classified by the Business Week magazine in 2007 as the second best performing Technology Company in Asia while it was the third largest globally in year 2006.
HTC has been ahead of one of its competitor Apple by breaking the technology trends in touch screen mobile telephones from 2002 onwards. (http://www. roc-taiwan-hn. com/) International Marketing A company becomes a ‘multinational corporation-MNC’ when it conducts any business function beyond its domestic borders’ (Cullen & Parboteeah, 2010). Internationally HTC has captured markets of Asia & Europe. Their principles are to promote trust, openness, teamwork, and professionalism, and pride as part of their principles across the globe.
From a global market share of 2% in 2010, HTC is aiming to hold 10 -15 % of the global smart-phone market share. The CEO of HTC Mr Chou has announced that there are four American telecom carriers have been promoting the device in the U. S. market. This marks the first time that HTC has collaborated with four U. S. telecom operators to simultaneously promote sales of a single HTC handset. Adding to this part of the company’s new marketing strategy to enter international markets Source:
Gartnerr Research HTC Entering International Market HTC is probably inexperienced with dealing with political issues associated with different countries. Therefore, it is most likely a good idea that HTC decided not to merge with a company that was involved in different world markets such as Apple, Samsung or Nokia. They have instead chosen to take a slower route to internationalization, e. g. the US market which was a difficult market to get through as it is a closed market.
Therefore HTC can’t sell its mobile phones directly to customers, so it has to be sold to network providers and then the operators sell it to their customers on behalf of HTC as agreed partnership (http://www. behance. net/). Researching international markets & emerging markets According to thomaswhite. com, whatever the reasons are; the East Asian nations of South Korea and Taiwan have transformed themselves from being the manufacturing backyards of the USA and Japan into high-tech giants in just over a generation.
Their expertise in the field of electronics is impressive and all-encircling. The market for mobile phones includes of two significant markets segmentations; 1st the fundamental, ultra-inexpensive mobile phones which offers very little or just the basic function of the traditional communications boundaries. These inexpensive devices come with the basic voice telecommunication and text messaging services.
2nd the technologically advanced types of phones are widely referred as smart-phones, they are assembled in and from a variety of technologies, scoping from the internet to video-calling. Both segments of the market are ultra-competitive, although the smart-phones segment offers slightly better margins. Therefore the emergence of the Taiwanese mobile phone manufacturer, HTC which was involved in the design and manufacturing of cell phones for other organisations such as Microsoft and Google, has therefore transformed itself into a mobile phone brand (HTC) in recent years.
International marketing environment The major component of external environment that affect businesses in various ways are the forces of globalisation (Paul, 2006) and the way the organisation has go forward from its start to its actual position, shows that HTC own this force at first and foremost. HTC started operations as an individual Brand on the global scale since 2006, thus because of the globalisation, HTC reached its customers on the global marketplace.
According to Shelly and Rosenblatt (2009) nowadays organisations cannot operate at all without the use of the internet in a way or another. The internet as an external factor had considerable achievements on the development of HTC at two levels. 1st: HTC was competent to differentiate and improve its smart-phones on the basis of internet, by including one of its key features which is the internet browsing possibility. Other companies on the marketplace manufacturing mobile phones do not have many advanced elements that can be found on HTC smart-phones.
Therefore without the external factor of the internet, HTC would have never developed to its current level of brand image and profitability on the international market 2nd: HTC has greatly benefited from internet in the same way that most other business benefited as well. In particular, internet was an external factor that assisted HTC to be ahead of its current level through endow with platform to reach to the global market area, to promote its products globally and to get your hands on strategic partners as well as to correspond with its stakeholders at the global level.
International Marketing Strategies The international marketing strategies of HTC have its uniqueness compared to some of its competitors. The marketing management of HTC has helped the organisation to penetrate numerous new markets and carried out efficient changes with rigid formulas within the existing markets. HTC has been identified in the leadership position through the process of adopting innovative approach in production & design and introducing to the market the first tri-band UMTS 3G device on the Microsoft Windows Mobile platform (2006), the first Microsoft Windows Smartphone (2006), the first Tri-band UMTS PDA, and the first spontaneous touch screen to allow finger tip navigation (2007) (Products and Innovation, 2010).
By analysing HTC’s strategy, product differentiation and cost leadership are regarded as to be the lane to the market scope; whereas segmentation strategy is a narrow market scope (Porter, 1998) Product expansion is rarely used by HTC when the company introduces new creations to its existing active markets. Recent growth was realized by the company by introducing the HTC One and previously with HTC Titan as well as the HTC Desires series for the medium-low range market (htc. com).
Product & Pricing Strategies As per Condor (2010) HTC’s marketing strategy is going through massive changes since the company is introducing more low-cost devices. The mid-pricing strategy adopted by HTC has been ultra-successful, since the company believes that its products are specifically customised to gratify customer’s desires. HTC’s customers are willing to pay even a higher price as they believe that HTC’s products has features that worth the premium prices.
HTC smart-phones prices vary from a country to another according to the economical status of the country (htc. com). Marketing plan of HTC HTC’s marketing plan was in reverse gear in 2012 compared to 2011, where the mobile phone manufacturer did better according to the company’s annual report 2012. The CEO of the Organisation Mr Chou ultimately believes it was HTC’s poor marketing that led to disappointment in year 2012. He revealed that HTC can be expected to redouble its promotional efforts in 2013 (http://www. theverge. com/).
The chief marketing officer (CMO) John Wang has decided to go for a more passive and aggressive direction with its marketing plan as from 2013 to boost up profit maximisation through innovation and customer satisfaction. Marketing mix of HTC Marketing mix is well thought-out to be the fundamental element of marketing communication. Buhler et al (2009) revealed that marketing mix was at the outset referred to as 4P’s of marketing with the combination of product, price, place & promotion. The 4P’s can be study individually as part of a broad HTC marketing strategy analysis.
HTC products are widely known for their range of smart-phones which are innovative in their design and functions. Product HTC’s own brand was developed from the personal digital assistant (PDA) market to smart-phone products manufacturer (Asemi et al, 2011). It depends on the products specifications and the number and types of functions the product can perform. It also values the segmented market of the product such as low-cost, mid range or high end market. HTC’s products focus on the mid range & high end segment.
Prices of HTC products are not unlike dramatically compared to the products of its competitors, such as Apple, Nokia and others, and the price of each individual category of mobile phone. Place in the case of a mobile phone manufacturer is to have the widest possible market share globally. HTC has got a massive presence in Europe & Asia, with emerging markets over USA and Africa. On the Australian continent the Taiwanese manufacturer of cellular phone has also been powerful due to the increasing number of Android software user on the continent.
The place element of the HTC’s marketing mix are available from many locations within all forty countries the company has operations in, as well as through the company web-site. Promotional techniques used by HTC to advertise their products are mainly posters promotions via mobile phone shops windows and promotions in popular media such as magazines, newspapers and TV channels to penetrate the larger market. In essence HTC marketing strategy that has allowed the company to enter new markets was based on innovation and ensuring the high level of friendly user interface in its products.
International marketing culture of HTC One of the most important factors to consider when penetrating an international market is the local cultural differences which can be a source of massive challenge. HTC usually take into account the cultural factors when engaging in international expansion. Each individual or group of people have different perceptions of life, different life values, beliefs and different ways of doing things. Without any doubts these differences would reflect on how they perceive HTC brand in general, and each specific products in particular as well.
These issue are addressed the management of the organisation in the most efficient approach, since international expansion has been identified as the foundation of strategic plans of any company (Gray, 2013. htcsource. com) So far, all the challenge associated with various local cultural differences where HTC has entered has not yet affected HTC negatively. Particularly when the possible issues associated with cultural differences narrate to combine marketing communications efforts of any foreign corporation engaged in business in a country. E. g. the marketing communication efforts in most European countries and USA would at times involve women to feature in their publicity with allusions to their sex appeal.
While such type of publicity are perfectly suitable in the western world, the same publicity would be judged to be offensive in some Asian, and Arab countries, due to cultural, religious or else differences. Any global organisation aiming for further international expansion that prefer ignoring such issues in their marketing communications and other aspects of their businesses, would be at risk to attract negative reputation for their brand image, which will damage the value of the brand on the long-term basis.
International marketing communication strategies HTC do not take on a “me-too” strategy and persists not to follow or directly competing with its clients in the market. The mobile phone organisation has put into practice as its marketing communication strategies the transformation of the company from Taiwanese to International by sustaining the silicon-valley culture to promote innovation. This has been implemented by the formation of a global marketing resource team. Their primary target market is the first time smart-phone user.
The marketing communication strategy has been driven by the branding strategy and product awareness.
HTC’s SWOT Analysis Swot-Internal Analysis:
Weakness: Leading PDA & Smart-Phone Manufacturer High Manufacturing Cost Strong Research & Development Set-up Low Brand Awareness Strong Relationship with Business Partners Lack of Products in Low Price Category Branded & Perceived as “Value for Money” Products Do not have own operating system Swot-External Analysis:
Opportunity: Threats: Increasing demand for touch screen phones with 3G Technologies Patent Wars Fast Growing & Emerging MarketsLess Customer Loyalty Development of App’s to add value to customers Rapid Technological Change HTC mini tablet could be the next Market sensation Expected competitors tie-up, e. g Google acquiring.
Motorola SWOT Critical Analysis
The brand position of HTC is appropriately perfect; smart-phone is the proper choice of most customers. Without doubt the smart-phone market is a prospective market for HTC to keep investing. However, in significant markets such as China and USA, where most people still use cheap phones the demands for mid-range or mass price cell phones are still huge.
HTC do have a pricing advantage over Apple and Samsung, but the low brand awareness do not appeal to the young generation or even first time smart-phone users. Therefore having some low price product branded HTC might be a threat to the mid range & high end market, if we take as example the story of Toyota & Lexus, which has disappointed many luxury car customers when they have found that Lexus was a product of Toyota. However as tablets are very fashionable at the moment, HTC could accelerate its research & development in to the manufacturing of an HTC tablet.
Recommendation 1: As a major player in the telecommunications industry, it is highly recommended that HTC consider opening its own application storefront as this will help creating their own operating platforms which will give them more control over their operations.
Recommendation 2: According to the HTC annual report (2012), 5% of its revenue is reinvested into research & development, they should therefore participate into launching new products range such as tablets and messaging systems; since they already have a strong structure in implementing new product lines.
Recommendation 3: The slogan of HTC is “Quietly Brilliant” and it is recommended that HTC develop an aggressive and noisy marketing campaign to build up their brand awareness and position themselves among Samsung & Apple. Conclusion As a mobile phone manufacturer, HTC has mainly diverse components and do assemble them in an eye-catching way to sell to its customers. Being able to bring to the market the very first touch screen smart-phone three weeks before Iphone, clearly shows the capacity of HTC’s engineers and this is the main reason for their success in the industry.
HTC’s management team and engineering team can pride themselves for manufacturing one of the best brand mobile phones on the market nowadays. HTC also have various sources of differentiation such as innovation, style & quality. As outlined above, the competitive advantages of HTC are their Research & Development, customization abilities, and partnerships with software, operators such as Microsoft & Google. This is a more powerful resource for HTC to open its own storefront and build up customer loyalty.