ASUS gets into the festive spirit

Early this year ASUS, the Taiwanese electronics major, launched a smartphone priced at Rs 5,299, clearly targeted at the entry-level mobile phone buyer in the country. And then in August, it launched a phone priced at Rs 62,999; this one targeted at other extreme end of the segment, at the buyer of premium phones. Its sharp swing between two ends of the price range has had everyone baffled, especially at a time when the market is getting increasingly crowded with new products and when conventional wisdom states that brands ought to build on their core customers instead of looking to acquire new ones. Is ASUS risking everything by moving away from its present position as a mid-segment player to one that addresses the needs of phone buyers across the spectrum?

  • In May this year, Sonakshi Sinha was brought on board as part of ASUS’s #LiveUnplugged campaign
  • She is the brand’s first ever celebrity endorser in India and apart from being associated with their campaigns, will use select phones prior to their launch in the country
  • Sinha also launched the ASUS Zenfone Max through a live streaming event apart from being part of a digital-only short film for the brand

Peter Chang, regional head of South Asia and country manager (System Business Group), ASUS India believes that the brand is strong enough to withstand the changes being brought about by the company. "We don't want people to link us only to mid or mainstream, but be associated with all smartphones," says Chang. To that end, the company plans to launch one (or several) phone(s) in every price range in the coming months.

ASUS, which started out as a laptop and notebook company and practically invented the netbook, forayed into smartphones in India in mid-2014. It has thus far focused on the cheap to mid-segment phones sticking to a price range of Rs 8,000 to Rs 50,000 a unit. But now with the newly launched Zenfone 3 Deluxe at Rs 62,999, which costs Rs 3,000 more than the high-end phablet Samsung Galaxy Note 7, it is sticking its brand into hitherto uncharted territories.

ASUS has said that it would like to cater to a more diverse audience and not limit its products to a single segment. It started out with the mid segment because it was looking for mass appeal, the Rs 8,000-12,000 segment makes for nearly 60 per cent of the market in the country. The objective was achieving scale, says Chang.

The company did not touch the entry and premium segment. "We believed that we will not be able to find balance between the technology and price," he says. The strategy paid off and in the two years that it has been in the country, the company says, it has managed to capture 2.5 per cent of the smartphone market.

To be a credible smartphone brand, one cannot avoid addressing the different needs of customers and after two years, Chang says, the company now has the right technology and product to enter other segments.

According to IDC, the smartphone market in India was 103 million smartphone units in shipments for 2015. ASUS puts the updated numbers for 2016 at around 11.4 crore units. Whatever the final figure at the end of the current year, phone makers are more than keen for a slice in one of the fastest growing markets in the world.

Over the next year, ASUS says, it wants to double its share of this market to five per cent and then go up to seven per cent in three years. For this the brand has a two-pronged strategy. One is to make its phones available at all price points. Interestingly, by doing this, ASUS is adopting a strategy that is largely used by FMCG companies. Companies such as Hindustan Unilever, P&G, Godrej and others have made it an established practice to offer products across price points thereby providing customers the maximum opportunity to find the brand. Smartphone brands, however, have by and large focused on building a strong following in any one segment of the market, believing in keeping their brand identities distinct across price points. Other smartphone companies have attempted moving across the price spectrum (think Micromax), but in many cases, this has led to the brand exiting one category entirely to focus on the other.

The second part of ASUS's brand expansion strategy will be to get more frequent and more aggressive with its marketing and promotional pitches. The company has decided, like most in the industry, to focus keenly on digital media for sales and promotions. Chang says that the company needs to have different strategies for sales and communication for each product, but the company is still formalising its plans and is not ready to share any details yet.

ASUS is in the midst of crafting its campaign strategy. And the company is looking more closely at the digital space for its new launches. It is not ruling out the use of traditional media altogether, however. Its choice of media will depend on the category of the product and the customer age group it is being pitched to. For the Zenfone 3 Deluxe, targeted at premium customers, the company has roped in Sonakshi Sinha as its brand ambassador and the campaign has been launched on YouTube. ASUS says that it is talking to other brand ambassadors for other products and every two months, the company plans to come out with new campaigns for each product.

Chang also says that the company will expand the 12,000 points of sales that it currently has. The ideal number is pegged at 40,000-50,000, which the company expects to put in place over the next 12 months. The company has also set up 120 exclusive outlets and is focusing on after-sales service as it looks to penetrate deeper into the market. Over the next few months as handset makers look to maximise their gains from the upcoming festive season, ASUS can be sure that it will not be the only brand raising its pitch and its true test would be in creating a brand communication that not just cuts through the clutter, but also the noise.

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