HTC hikes marketing spend by 250%, but problems run deeper
| by Nikhil Subramaniam |
Despite having some of the best smartphones in each segment in its portfolio, HTC has been relying on the age-old excuse that its marketing has just not been up to the mark. The Taiwanese company has retained its "Quietly Brilliant" tagline for a while, but maybe the silence is getting to it now.
HTC is about to ditch the slogan and go with something new. The company has decided to market its new HTC One flagship as “bold, authentic and playful.” It's not altogether surprising that HTC decided to do away with the slogan, as it has made a lot of noise about the One's so-called advantages over the competition, most notably the Galaxy S4.
"We have a lot of innovative ideas, but we have not publicised them enough in the past," Benjamin Ho, HTC’s Chief Marketing Officer, was quoted as saying by Focus Taiwan. Demystifying the marketing speak, Ho said "bold" denotes HTC’s aggressive push for its products; "authentic" indicates HTC’s focus on innovation rather than aping the competition, and "playful" suggests that HTC will create more interesting features based on consumer demand.
Ho said HTC will be increasing its digital marketing budget by 250 percent this year compared with 2012, and traditional media marketing spending by 100 percent. Perhaps HTC is realising that to stay relevant among loud competitors like Samsung and Apple, it has to play their game and play it with all it's got.
No longer quiet
After Samsung’s massive surge, HTC’s reasoning was that its rivals had stronger budgets in comparison to the Taoyuan-based manufacturer. "Our competitors were too strong and very resourceful, pouring in lots of money into marketing. We haven't done enough on the marketing front,” the company’s CEO Peter Chou had said last year.
HTC have known for a while that Samsung’s marketing budget, inflated as it may be, has worked wonders for the company. But somehow it has stuck to its quietness and even cut its marketing budget last year along with R&D spending. HTC's gross margins slid from 28 percent to 25 percent in 2012, forcing it to cut R&D spending by 15 percent, advertising/marketing by nearly 45 percent, and administrative overhead by 30 percent. But this year, the company is going for a bigger push.
Can the HTC One turn the company's fortunes?
The One's biggest competition
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