Marketing Strategy of ZTE in America

When night approaches San Francisco, the worldwide famous bay bridge starts to be crowded by blocks of cars. Automobile tail light sparkles in the darkness, which extends from San Francisco to Oracle Arena of Auckland. Many a fan gathered here in particular to cheer for Golden State Warriors, which was one reason of heavy traffic. In the hot season of 2014-2015, Golden State Warriors has been the largest champion hot, with its first winning rate up to now. Oracle Arena is also regarded as the most horrible magical home field. Almost all rivals have been defeated.

Here is also the home of field of ZTE Corporation.

ZTE Corporation has cooperated with three NBA teams in October of 2014 including Golden State Warriors, being the official smartphones sponsor of Golden State Warriors. Nowadays ZTE Corporation also marched steadily and smoothly with the Golden State Warriors being braver after more fight.

By the end of the fourth quarter of 2014, ZTE ranked the fourth in American mobile phone market, which has occupied 7% market shares. And prepayment market share is 21%, ranking second. In the fourth quarter of 2014, the American shipment of ZTE mobile phone has risen 80% from the earlier year.

“ZTE is capturing American’s hearts and wallets”. Maybe the report topic of local media has best expounded the current situation of ZTE.

Sports marketing localization

For Chip Bowers, the CEO of Golden State Warriors, one of the happiest things is that he can meet Cheng Lixin in playing day, who is senior vice-president and CEO of ZTE Corporation in North America district.

Because that means success-there is no exception before.

“Lixing is our lucky star.” Chip Bowers told Economy & Nation Weekly in February 1st, 2015. This day Golden State Warriors rightly fought against Suns. Previously Golden State Warriors has suffered twice defeats in succession. And in the first segment, Suns had leaded by 10 scores. However, Chip Bowers got relaxed at once when his subordinate told him Cheng Lixin had come here to watch match with his friends.

So it was! The final outcome was Golden State Warriors’ success with great advantage of19 scores.

Cheng Lixin was full of joy as well.

In the packed-out Oracle Arena, the LED screen of ZTE logo and ZTE mobile phone advertisement would appear in every corner every several minutes. In the half time, the random lottery draw will start and Cheng Lixin would award the prize for the lucky fans. Sometimes the prize is newly hot mobile phone of ZTE. Sometimes he would be invited to the central of playground to give out prize.

Profound accumulation: localization looks simple but actually difficult, success often lies in details

For example, upgrading of South American users is slow, the application demand of which also differ from other districts. The average cycle of changing mobile phone is 12-18 months. Thus the quality of hardware must guarantee good condition within two years and large upgrading space has to be maintained.

At the same time, the United States is rightly the market dominated by operators. Verizon, AT&T, Sprint and T-Mobile occupied the 90% market share. But operators are strict with mobile phones’ quality. For example, AT&T even has higher requirements for custom terminal products than US military. And if experience of users is not good after purchasing the mobile phones, unconditional return policy is allowed, which is completely different from Chinese market.

Even operators will judge if mobile phone vendors had a positive effect on markets, so they oppose tying the logo to mobile phones.

Besides, America is a market which is quite strict with intellectual property. Large corporations will frequently maintain its market share through patent litigation. Plenty of patent trolls who don’t make production also spare no efforts to pursue benefits. Once discovering vulnerabilities, they will rush on like a swarm of hornets to gain profits.

Consequently lots of famous companies failed after entering the American market.

As for ZTE its strategy is low profile layouts and steady approach.

In the beginning of 2010, ZTE promoted its new marketing strategy; many a mobile phone was just attached the brand of operators. Only like this can it push its way in the supplying system. And then it can cooperate well with local operators and users.

Meanwhile ZTE also devote more to confirm its patent field and succeeded in fighting off patent trolls.

With operating strategy being more and more mature, ZTE Corporation started brand stretching. On one hand, it starts sticking the logo on the new mobile phones. On the other hand, new sports marketing strategy set up by cooperating with NBA. For example the brand awareness had improved from less than 1% to 16% just by sponsoring Houston Rockets.

Nowadays ZTE Corporation has succeeded in accessing to the whole operators with more than 100 kinds of products. What’s more, all mobile phones sold in America were tied its own logo.

Creating and breakthrough: Cheng Lixin doesn’t follow blindly but wait for opportunity to hunt for breakthrough

North America mobile phones started a new trend of exchanging cellphones. At that time all manufacturers focused energy on postpaid market. However ZTE chose the ignored prepaid markets and invested a lot.

Before this many people considered American users were different from Asian users and Americans may not love large screen mobile phones. Nevertheless Cheng Lixin confirmed there was a huge potential market locally by much investigation and research.

“Americans get accustomed in large houses and big cars, so large mobile phones are easily accepted.” He spoke to journalists after one exhibition. Afterwards he returned to Dallas (the head office of ZTE in America) only to find his statement had become the headlines of newspapers.

Before long ZTE Corporation launched 4.3 in. large screen mobile phone ZTE Warp and made a success with the sale of 1 million, standing firm in American market. The hot ZTE cellphones in China also were sought after by the American market upon landing.

Besides LET technology recondition and tablets crossover also supplied good chance for ZTE enhance market share.

Global radiation: opening American market meant much to ZTE in the transition

In 2014 ZTE also suffered a great crisis when many domestic brands fought fiercely in overseas markets.

In the beginning of 2014 ZTE did adjusting in a large scale and the vice-president of ZTE Corporation Zeng Xuezhong began to take charge of ZTE terminal business unit. Afterwards ZTE Corporation started a full-scale transforming such as production creation, channel adjusting, managing team adjusting, talents gaining and new mobile phone manufacturer investing.

In China Zeng Xuezhong reduced the production of middle-to-low-range mobile phones and developed vigorously in e-commerce and public channel. Mobile phones at a loss were stopped from being producing; Zeng Xuezhong gave more space to senior executives of every district in products, designing, promotion, and operators cooperating and so on, which can bring clearer achievement and responsibility distributing.

In the whole of 2014, all terminal products shipment of ZTE Corporation has reached 48 million, realizing the dual increase in sale scale and gross margin. In addition, brand and experience of users also improved quite a lot.

In this competition, American market played an important role because America is not the market of highest but the gathering place of high technology, which directly radiated North America and European countries.

According to the lecture of Zeng Xuezhong, the mobile phone key market of ZTE in the future is right concentration of both China and America, radiating the global markets.