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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Introduction

​Tencent Holdings Ltd. is a Chinese based investment company with its headquarter in Shenzhen. Its core investment is in the internet industry and is the world's largest gaming company and China's second largest e-Commerce company. Tencent was founded in November 1998 by Chen Yidan, Zhang Zhidong and Zeng Liqing and has grown to be China's leader in the provision of Internet value added services (Tencent, n.d.). From the time it was established, Tencent has succeeded in maintaining a steady and stable growth which is attributed to its strategies in operations which are user-oriented. Tencent Holdings Limited was enlisted on the Hong Kong Stock Exchange in June 2004 (Tencent, n.d.).

Industry

​Tencent holdings is in internet industry as it is engaged in providing online value-added services operating through segments such as: value-added services, Online Advertising, among others. Its core business is in the value-added services segment which involves the following: online and mobile games, community value-added services, as well as applications all through different Internet as well as mobile platforms (Luo, 2012).

Competitors

​China's e-Commerce market is highly saturated but given the size of Tencent holdings; it only has one serious competitor and that is Alibaba the largest e-Commerce company in the world. Alibaba is a formidable rival to Tencent mainly because of its focused and innovative attention on diversification. Alibaba has been fashioning itself with identities that focus less on online shopping and more on having an approach that is integrated to life. This is by having additions such as food delivery with mobile payments even at ground level partnering with several physical stores in its markets (PYMNTS, 2017).

Promotional Methods

​Tencent is considered as a pioneer in the technology sector with numerous renowned Social Network Applications, Payment Systems, Entertainment and Gaming Platforms and Artificial Intelligence under its umbrella with a vast amount of users. Tencent's promotional strategy consist of heavy advertising and marketing through public relations where each subsidiary is given freedom to practice its own promotional strategy through their own applications and communication channels. For example, Riot Games which is owned by Tencent advertises its video games at its discretion (MBASKOOL, n.d.). Also WeChat which another brand of Tencent has become one of the major channels for brand offerings and advertising for brands with advertising needs in China (Marketing of China, n.d.).

Customer Segmentation

The company's mission is to “enhance the quality of human life through Internet services” (Tencent, n.d.). In line with this mission Tencent is involved in the provision of services centering on social platforms as well as digital content. Being in the internet industry, Tencent has divided its users into three major groups in accordance to age: 10 to 25 youths who are mainly students who like the new and flashy things whereby they changes preferences very fast they are in the dating scene and well vast with fashion entertainment etc;26-50 where there is the bulk of the working class and married people hence cater to family values and professional values  etc  over 50 being the last group comprising of conservative people interests being very traditional, not well vast with the use of technology etc (Ricky, 2014). It caters to these market segments through product differentiation hosting China's leading Internet platforms whereby under QQ it has QQ Instant Messenger, QQ.com, QQ Games, Qzone,there is WeChat last but not least Tenpay (Tencent, n.d.).

Critical Advertisement Tasks

With online advertising there are advertisements that are display based and performance based. The constituents of other segments are licensing of trademark, services in software development, and sales of software among other services. Presently, it is involved in the provision of services centering on social platforms as well as digital content which it does through the “Connection” Strategy (Ricky, 2014)

In this marketing strategy, the market is divided into different consumer groups in accordance to various measures based on the sharing of similar needs as well as application of goods and services. One of the major advantage of the use of market segmentation is customization of consumer needs best achieved through segmented marketing plan delegated to each of them.  This helps in increasing organization, allocation of the necessary resources and hence competitiveness hence leading in the market segment as it is evident with Tencent holdings Ltd (Ricky, 2014).  

Media Strategy Analysis

Digital marketing strategy refers to a series of actions spearheading company goals through a carefully selected online marketing tools and channels. The said tool or channels maybe paid, earned, and owned media all support of a common campaign centered on a specific line of business. Tencent utilizes digital marketing strategy using its own media and brand positioning tactics with other notable media companies. Its own media is mainly comprised of Tencent Social Platforms most notably WeChat which as of 2017 was said to be in 94% of Chinese smartphone (Vizard, 2016).

This local market dominance is attributed to its successful marketing ecosystem that it built which is able to connect different platform within it (i.e the ecosystem). For example, WeChat can be used to send voice or text messages while feeding its users with news feeds provided by e.g Tencent News (Ricky, 2014) Within a news one can watch its video powered by Tencent Video for more information and while at it one can opt for a popular blog post to listen to music (courtesy of Tencent Music) etc. Aside from content differentiation, some of the other major advantages of digital marketing in real-time adverts and feedback from customers and real-time social networking while being exposed to promotional media content among others, and most of all easy brand promotion which Trencent is maximizing on (shoutersvoice.com). However, these advantages at the same time can also present major disadvantages such as real-time customer complaints as well as feedback which are also visible and open for public scrutiny (Pradhan, n.d.).

A good example of its campaign in this regard was seen its move to buy purchase content through exclusive deals with content creators such as HBO in 2011 (Reuters, 2014). This effectively gave Tencent exclusive rights to air HBO series such the world's highest rated series "Game of Thrones" (Reuters, 2014). This effectively pulls in a multi-million global viewership to its online platforms supplementing its marketing ecosystem as previously described.

Advertisement/Campaign Message Strategy – Appeal and Executional Framework

​Tencent's aims to grab maximum attention through their commercial advertisement. They appeal to their customers through emotions, humor and music where emotional and important messages are embedded within its commercial videos. An example of that is their TV commercial titled “Your Companion of 12 Years” for their popular instant messaging application QQ which was considered to be emotional and purposeful for capturing important messages such as the love of parents and family, fear of separating from family and the life of children who are aspired to study abroad (Fauna, 2011).

Ethics and Social Responsibility

Given the scope of its operations it is normal for Tencent to be subjected to a lot of scrutiny and criticisms on ethical and social responsibility grounds. For example its partnership with Time Warner Inc's HBO network may draw scrutiny from authorities. This is because HBO Tv shows are notorious for their provocative content e.g Tv series. "Game of Thrones" features unethical content such as violence, nudity, and incest. Yet again this is not uncommon of Tencent as being the world leading Games developer it is the owner of “Honour of kings” which is the world's most gross video game (Vizard, 2016). It has also been on the limelight in circumventing Chinese labor law and labor contract law such as its move in laying off Ku6.com employees which Social Security of Beijing's Haidian District sued them for (China CSR, 2016). On the positive side Tencent company has one of the biggest contributors towards CSR initiatives in China evident with its 2016 move to commit 100 million of its shares towards charity (China CSR, 2016).  

Conclusion

Tencent advertising campaign as demonstrated in this paper can be said to be working optimally.  It has taken digital marketing strategy to a whole new level that companies only aspire for. Its brand positioning tactics such as through partnerships, successful marketing ecosystem coupled with product differentiation has helped it stay relevant among its target customers. However as is typical of a company of its enormous size it faces ethical concerns that though can be dwarfed by its impressive CSR initiatives and online service offerings should not be ignored. All in all given its prevailing marketing trend and growth it is set to overthrow its main competitor Alibaba.

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