The combination of multiple market segmentation methods—taking OPPO as an example

Wang Xin 1155080983

Market segmentation, which divides target customers into smaller groups based on their shared traits, is an essential component of a company’s marketing strategy. Demographic, geographic, psychographic and behavioral characteristics are mostly used as bases of segmentation. By segmenting customers, companies can tailor products and services to satisfy customers’ specific needs, and communicate better with different customers in different ways. In addition, a company’s profit can be maximized through devoting itself to serving the most profitable customer segment.

It is important for companies to combine various segmentation approaches and adopt a dynamic segmentation strategy to focus on different customer sections in different developmental phases. OPPO’s success may be one of the best examples to illustrate this point.

OPPO is a Chinese electronics manufacturer company who has a strong performance recently in both domestic and overseas smartphone market. According to Asia/Pacific Quarterly Mobile Phone Tracker released in October 2016, OPPO and vivo (same as OPPO, another brand owned by BBK Corporation)have overtaken Huawei and become the top smartphone vendors in China for the first time in the third quarter of 2016.

Top Five Smartphone Vendors in PRC, Shipments, Market Share, and Year-Over-Year Growth, 2016Q3 Preliminary Data (Units in Millions)
Vendor	2016Q3 Shipment Volumes	2016Q3 Market Share	2015Q3 Shipment Volumes	2015Q3 Market Share	Year-Over-Year Growth
1. OPPO	20.1	17.5%	9.8	9.0%	106.1%
2. vivo	19.2	16.7%	9.5	8.8%	101.1%
3. Huawei	18.0	15.7%	17.2	15.8%	5.1%
4. Xiaomi	10.0	8.7%	17.3	15.9%	-42.3%
5. Apple	8.2	7.1%	12.4	11.4%	-34.1%
Others	39.6	34.3%	42.6	39.1%	-7.1%
Total	115.1	100%	108.8	100%	5.8%
Source: Asia/Pacific Quarterly Mobile Phone Tracker, Oct 28, 2016

1.     The initial stage

Geographic and behavioral segmentation

As reported by IDC, a key of OPPO’s triumph is its aggressive offline selling in Tier 3 to Tier 5 cities, where people have lower purchasing power comparing to Tier 1 cities but the population is huge. Higher-end brands like Apple and Samsung are not so popular in these small cities and rural areas because the majority of people there can’t afford such expensive prices. OPPO focuses on promoting mid-ranged and cost-effective phones like A37, A57 in these areas to cater to budget-conscious customers. By doing so OPPO successfully seized this big market with enormous potential, and built a strong domestic position in the initial stage.

Demographic segmentation

In terms of demographic segmentation, OPPO mainly aims at young female users who value the color, appearance, camera lens, and battery life of a smartphone more than other features. Thus, OPPO released a series of smartphone emphasizing on beautiful looks and wonderful selfie functions. In advertising, it hired several young famous celebrities to endorse its products, and sponsored popular TV programs like The Voice of China, creating a fashionable brand image.

Celebrities endorsing OPPO smartphones in advertisements

OPPO also launches special campaigns targeting young female users. For instance, it gives away Dior lipsticks as gifts once customers buy phones on Women’s Day. And it has cooperated with the cosmetics company L’Oréal Paris.

OPPO’s official website promoting the Women’s Day special offer

2.     The expansion stage

Psychographic segmentation

After OPPO gained a firm foothold in domestic mid-ranged market, it intended to expand to high-end and specialist market. A 3-year partnership with the Spanish soccer team FC Barcelona may be seen as a significant attempt of OPPO. It announced that OPPO would serve as the official mobile phone partner of FC Barcelona from 2015 to 2018.

Along with this cooperation, OPPO has launched a special F1 edition, matching FC Barcelona’s colors, and an insignia is engraved on the back. The phone was designed to target football fans, and the strategy turned out very effective that it became quite popular among football fans. It is also beneficial for OPPO to increase its brand awareness in Europe.

OPPO launched F1 Barcelona edition

OPPO’s another edition of high-end smartphone, R9 and R9 Plus are targeting selfie addicts by equipping with 16 mega-pixel cameras on the front.

Geographic segmentation

OPPO customized different promotion and advertising strategies in different countries and regions to cope with the cultural diversity. For example, In India, OPPO uses Indian models to present its products and films the advertisement in the Bollywood dancing style. OPPO also communicates with overseas customers on dominant SNSs like Facebook and Twitter, which is different from its domestic communicating channels.

OPPO’s Bollywood-style advertisement in India

       To conclude, OPPO combines multiple segmentation methods and utilizes a dynamic segmentation approach to adapt its marketing strategy to changing business objectives in different developmental stages, which contributes to its successful business performance.

References:

IDC：OPPO tops the Chinese smartphone market for the very first time

https://www.idc.com/getdoc.jsp?containerId=prCHE41886016

OPPO officially announces three-year partnership with Spanish soccer team FC Barcelona

http://www.androidauthority.com/oppo-fc-barcelona-partnership-626554/

OPPO F1 Plus FC Barcelona Edition hands-on

http://www.androidauthority.com/oppo-f1-plus-fc-barcelona-edition-706616/

OPPO R9, R9 Plus debut with 16MP front cameras

https://www.slashgear.com/oppo-r9-r9-plus-debut-with-16mp-front-cameras-17432243/

How OPPO phone is a tough competitor for leading phone brands?

http://www.oshup.com/how-oppo-phone-is-a-tough-competitor-for-leading-phone-brands/