Running Head: LENOVOS BUSINESS MARKETS AND MARKET SEGMENTS

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LENOVOS BUSINESS MARKETS AND MARKET SEGMENTS

Introduction
Lenovo brand of computers is one of the fastest growing brands of computers in the
world at present. This is mainly because; the Lenovo computer makers strive to be the leaders of
the global market share in each of the markets that they serve. In 2004, Lenovo bought the
personal computer business and brand Think Pad of the famous computer IBM all over the
world. This transaction was a landmark that elevated Lenovo to a completely new level leading
to the Lenovo brand becoming a global application company with their own package plant in
seven countries as well as cooperation plants in many other nations. After bypassing Dell and
Acer, Lenovo are now the second largest selling computer brand in the entire world.
The Lenovo brand from China is currently focused on foreign markets. Even though
China is the leading smart phone market globally, it is saturated meaning the boom days are
nearly over. According to Lenovos CEO, the Chinese market is no longer hyper-growing and for
them to win, they have to go in search of new growth areas. This is also the case with the
personal computer business. Starting in 2004, the company started selling its personal computers
outside China to other emerging markets followed by the sale of smart phones in 2012 to these
same emerging markets. The efforts have paid off with the company selling more than 20 percent
of its products in foreign markets. The demand for its products is even stronger in the emerging
markets outside China such as Middle East, Europe and Africa with the companys Smartphone
and personal computer business growing 400% each year in the quarter. With the stagnation of
the demand for PCs, the smart phone business becomes even more important to the Lenovo
company in terms of diversifying its revenue with the recent purchase of Motorola Mobility
helping the company gain global market share (Henchy, 2012). Following this merger, Lenovo is
expected to rank as the third biggest smart phone vendor in the world behind Apple and

LENOVOS BUSINESS MARKETS AND MARKET SEGMENTS

Samsung. China still accounts for the biggest market share of smart phones with 34 percent of
the global Smartphone shipments going to China in the third quarter of 2012. This is far ahead of
the second largest shipment, which went to the U.S at only 13 percent. However, unlike the U.S.,
China has a dozen handset brands with most of these brands coming from domestic companies
making it the most competitive Smartphone market. Lenovo handsets and PCs are now being
sold in over 45 countries with the company experiencing a growth in net profit by 19 percent
every year to a value of $262 million in the third-quarter ending on 30th September (Chen, 2006).
Lenovos organizational buying behaviour seeks a balance between getting the maximum
advantage of older technologies and introducing new technologies. With the company realizing
that the next five years will bring many changes to the IT industry, it is keen to move on to new,
innovative technologies, and business strategies to avert the global financial crisis. There is quite
a significant variation upgrade and replacement frequency of desktops and laptops even though
each type of computer is replaced in nearly the same timeframe. However, most of the computers
are not replaced at a set frequency but according to financial or technology considerations (Chen,
2006). For both set of computers, replacement and upgrade of 28 percent of them has no set time
and mainly depends on technology, 8 percent is determined by finance/leasing/tax
considerations, about 12 percent is upgraded/replaced after more than 4 years, 20 percent within
3-4 years, 21 percent between 2-3 years and 13 percent within less than 2 years. The global
financial crisis also played a role on PC purchasing behaviour. Even though it is now in the past,
most companies are still buying more PCs to catch up from the slowdown in purchases that was
experienced during the crisis with some using the crisis to accelerate their companys PC
purchasing strategy (Dollar, 1990).

LENOVOS BUSINESS MARKETS AND MARKET SEGMENTS

Most personal computer users want assurances during the post-purchase period that they
will be properly looked after making after sale service the most essential PC purchasing factor.
This is followed largely by the functioning of the operating system and its compatibility with
future and current applications (Porter, 2003). As to the influence on the PC purchasing, all the
groups within the organization have some degree of influence on PC purchasing with the most
important being the CIOs, the IT managers and the senior management of the Lenovo company.
The biggest influence comes from the senior management with statistics from respondents
placing the influence at slightly over 40 percent. The next most influential category is the IT/CIO
managers at 32.7% with the least influential category being that of middle management and the
individual employees (Yang, 2006).
Due to the rapid trend in growth by Lenovo, new market segmentations have been
identified to cater for this rapid growth of accomplishments. The current target markets for the
company include rural customers with strong brand awareness, city customers, customers with a
high level of education and advanced concepts. In view of the city consumers, the Executive
Suites segment best fits the Lenovos target audience. The Executive Suites are made up of
upper-middle-class couples and singles who own a management career position. These
consumers who usually have a hunger for latest technology, travel vacations financial products
and aerobic exercises are located within exurban and suburban communities. They are usually
people with good physical health with their ages ranging from thirty to fifty-five respectively.
This segment is mostly made up of civilians of Caucasian or Asian decent with college degrees.
The executive suite is usually made up of one child per family and they are therefore categorized
as socially affleunt. They are huge fans of effective computer equipment, healthy foods, full
range of big-box retailers and consumer electronics. The second segment that is targeted by

LENOVOS BUSINESS MARKETS AND MARKET SEGMENTS

Lenovo is the rural consumers. Being that the company is on the path of brand escalation, the
segment that is most suitable is what is known as Old Milltowns. These category of consumers
are those whose finances reside at a downscale since they are mostly retired. They usually range
between ages of 65 or older. This also means that they are mostly homeowners with selfregulating employed children. IT is a market that has a growing need for personal computers to
help them pass their time at home as well as manage any business interests that they may have
(2012,04).
The third market segment includes college students, university students and any other
group is involved in the learning phase. This segment involves those who are using personal
computers for educational purposes or for social networking. They usually range from the ages
of 15 to 30 years. They have high usage of computers for research purposes to interact with
friends using social media as well as for entertainment purposes such as watching movies. It is a
highly growing segment of computer users that fancies new applications and the Lenovo
Company mostly targets this segment when thinking of technological advancement (2012, 04).
Conclusion
Lenovos major business markets are based in Europe, Asia, Africa and the Middle East.
Traditionally based in China, the Lenovo brand has diversified due to the stagnation in the
Chinese market. This diversification has been targeted at new emerging markets in Europe,
Middle East, Africa and the United States. Their organizational buying behaviour concerning the
replacements and upgrades is closely related with the companys market segments since the
companys aim is to fulfil the needs of its consumers. Most of the upgrades target the third
segment of student population that are in the innovation stage and who fancy new technology.

LENOVOS BUSINESS MARKETS AND MARKET SEGMENTS

The Executive Suites are also lovers of electronic and computer gadgets and they are also
included in most of the major upgrades especially since they have the financial capability to
purchase most of the upgraded PCs in the market. Lenovo is a fast growing company with
growing popularity both in China and the new emerging markets and with the new trends in the
market, the sky seems to be the limit.

LENOVOS BUSINESS MARKETS AND MARKET SEGMENTS

References
Chen, Y. J. (2006). Global brand's marketing communication research - a case study of Lenovo
PC, master's thesis, Graduate institute of communication, Shih Hsin University, Taiwan.
David Henchy (March 1 2012), Developing a New Market for Lenovo, Integrated Marketing
Communication. Retrieved on 20th January 2015 from
http://press.emerson.edu/imc/2012/03/01/developing-a-new-market-for-lenovo/
Dollar, D. (1990). The financial structure of the enterprise. Journal of the accounting and
financial, 1(10), Gan, Huaming. (2002). Business Strategy. Beijing international press,
p27
Porter M. (2003). Competitive Strategy, Simon& Schuster Press
Yang, Y. G. (2006). The product strategy of the Lenovo, Economy Journal, 8(1)
(2012,04). Lenovo Market Segmentation. StudyMode.com. Retrieved 19th January. 2015. From
http://www.studymode.com/essays/Lenovo-Market-Segmentation-977973.html