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Marketing and Planning Process: Blackberry - Report Example

Summary
The paper "Marketing and Planning Process: Blackberry" carries out a marketing research and planning project of Blackberry Company covering a period of twelve months. It provides a market overview, strategies for a new product, and a promotional program. …
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Extract of sample "Marketing and Planning Process: Blackberry"

Marketing research and planning process: Blackberry BY YOU YOUR SCHOOL INFO HERE HERE TABLE OF CONTENTS Introduction 2. Corporate objectives 3. Market overview 4. Marketing audit – internal and external 4.1 The 4Ps model 4.2 SWOT Analysis 4.3 Porter’s Five Forces 4.4 PESTEL analysis 5. Assumptions 6. Marketing objectives 7. Strategies for new product 8. Promotional programme References 1. Introduction Blackberry, in 2003, was a pioneer as the first developer of the modern smartphone concept, producing the first multi-functional mobile IT devices with text messaging capabilities, ability to access the Internet, and email functionality (Blackberry 2014). By 2007, in a market environment where Blackberry maintained no competition capable of producing such innovations, Blackberry achieved sales revenues of $6 million USD (Blackberry 2008). By the end of 2011, these revenues had exploded to $19 million USD (Blackberry 2012). Blackberry had achieved a brand reputation as a successful corporate innovator and had built considerable consumer loyalty for the firm’s ground-breaking and revolutionary smartphone developments. However, this market-cornering was starting to be slowed by the introduction of the Apple iPhone in 2007 that gave consumers a 2.0 megapixel camera, the ability to categorise a wide variety of multi-media, and support for many third-party applications that were unique as compared to the Blackberry. Emerging competition offering innovative variations on the original smartphone design continued to build consumer loyalty, eroding the pioneer reputation once experienced by Blackberry, a company that now was not offering innovative smartphone devices. A 2013 study found that consumers now believed Blackberry was an obsolete brand (Paul 2013). By 2013, negative consumer sentiment about the brand and a UK market where Apple and Samsung now held a whopping 75 percent of UK market share (Tech Sci 2012) have made it necessary for Blackberry to re-evaluate its competitive marketing strategies. As a result of this diminishing brand presence and continuously shrinking market share, this report conducts a marketing analysis and audit of Blackberry between 2013 and 2014. The report conducts a marketing audit to determine what factors are impacting Blackberry’s ability to recapture market share, determines new product innovations that could improve Blackberry’s competitive position, and describes potential new product introduction into this established UK market to make Blackberry a potent competitor in this dynamic market. 2. Corporate objectives To regain market share, Blackberry maintains three corporate objectives: Revenue growth - By 2014, Blackberry’s revenues fell by a massive 270 percent from 2011, to only $6.8 million (Blackberry 2014). Blackberry must improve its revenue growth. In 2014, Blackberry reported a net income loss of $5.87 million (Blackberry). To ensure profitability, Blackberry must achieve revenue improvement of 85 percent. Build relationships with a wholly different market - The UK smartphone market is dominated by the 25 to 30 year-old market demographic that maintains the highest usership of these hand-held devices (Styles 2013). Blackberry continues to market toward the older, professional demographics which is not achieving corporate success. The firm must target new markets effectively to capture market share. Repositioning – Blackberry continues to position itself as a market innovator in an environment where the historical target market no longer shares this belief about the company (Paul 2013). The business must identify a unique positioning strategy, other than that of pioneer, to regain a strong, differentiated brand identity. 3. Market overview There are currently over 30 million consumer users of smartphones in the UK (Statista 2013). As aforementioned, the 25 to 30 year-old segment is the largest, followed by the youth market between 16 and 24 years of age. By the year 2017, the entire UK smartphone market is predicted to be worth over four billion USD which is an industry expected to have an annual rate of growth of 23 percent (Tech Sci 2012). Currently, high consumer loyalty toward the Android operating system (common in Nokia and Samsung phones) is dominating this market. Samsung, the dominant Android smartphone manufacturer behind Apple, dominates loyalty toward the most desirable target segment, the 25 to 30 year-old market (Word Press 2012). Apple, the most dominant competitor, continues to utilise a positioning strategy as a market innovator which is legitimately supported by modified and revamped versions of the iPhone offering new capabilities and benefits from the product’s previous versions. For instance, the iPhone 6 now offers consumers storage capabilities of 64 GB, a camera with 8.0 megapixels (surpassing many digital camera brands), GPS technology, and the device weighs only four ounces (GSM Arena 2014). The Blackberry Z3, the 2014 launch of a comparable smartphone, weighs nearly six ounces, only 8GB of storage, and a 5.0 megapixel camera (GSM Arena 2014). To further illustrate how Blackberry is not keeping up with competitor advances in smartphones, a new Samsung Galaxy Tab device now offers consumers a digital pen that allows them to transform handwriting into text, a revolutionary smartphone concept, a front and rear camera, and a finger scanner (Samsung 2014). A comparison of industry products offered by main competition illustrates how Blackberry is failing to innovate appropriately to capture market interest. 4. Marketing audit – Internal and external 4.1 The 4Ps Model The 4Ps Model consists of emphasis on product, price, place and promotion of a brand (Baines, Fill and Page 2008). In terms of product, competition recognises that hand-held IT devices maintain a limited life cycle, moving from introduction through decline rather rapidly. This underpins competitors such as Apple and Samsung that continuously modify previous versions of their top-selling products with innovations such as the aforementioned stylus pen, increased camera pixilation and lighter-weight products. Figure 1 illustrates how focus on product is emphasised by Samsung. Figure 1: Product Focus at Samsung Source: Lester Banks. (2013). Create a slick smartphone ad using Blender. [online] Available at: http://lesterbanks.com/2011/09/create-a-slick-smartphone-ad-using-blender/ (accessed 8 December 2014). Samsung launches a modified or new innovative smartphone product every month (Marketing91 2014). Apple holds regular press conferences and seminars with the CEO and other executives to illustrate what new features and benefits will be expected prior to the launch of a new iPhone version to exemplify product in the marketing mix. In terms of price, Samsung and Apple have premium pricing structures founded on brand reputation, perceptions of quality built through years of promotion, and technological innovation. The newest smartphone for Samsung, the Galaxy S5, is priced at approximately £650 (Mercader 2014). The Apple iPhone 6 is priced at £539 (Apple 2014). When a brand is capable of developing brand loyalty, consumers are more willing to pay higher prices (Chaudhuri and Holbrook 2001). Pricing, in terms of competitors, is not a strategy tool for differentiation, but founded on legitimate innovations. The 2014 Blackberry Passport is priced at approximately £549 in the UK (Amazon.com 2014). The high, comparable price to genuine innovative competing brands is not justified by lagging innovation in product. In relation to promotion, Samsung and Apple are highly adept in using lifestyle marketing to gain consumer interest. Marketing literature asserts that when a brand gives the perception to consumers that it can improve their social self-expansion, they are more likely to be loyal to the brand (Zhang and Chan 2009). Figure 2 illustrates the competency of competition in terms of promotional strategy using psychographics (lifestyle) concepts. Figure 2: Samsung lifestyle advertising competency Source: Geeks are Sexy. (2013). Samsung spends an estimated $14 billion a year on advertising. [online] Available at: http://www.geeksaresexy.net/2013/11/30/samsung-spends-an-estimated-14-billion-a-year-on-advertising/ (accessed 10 December 2014). Research surveys have indicated that the most significant target market, the 25 to 30 year-old smartphone users, have a desire to explore life and look toward brands that can affirm social identity (MED 2008). Samsung appears to understand what constitutes the consumer characteristics related to their preferences and lifestyles with its live in a world of infinite possibilities communications. Competition that aligns integrated marketing communications with consumer social lifestyle and attitudes make their products more attractive. Blackberry, however, continues to promote itself as an innovator which is not conducive to current market sentiment about the brand. No competition in this industry has advantages in terms of place. Many competing smartphones and Blackberry are available through broad-ranging channels, including self-owned stores, the Internet, and through service providers (such as Vodaphone and Verizon). Sales teams provide similar service models. 4.2 SWOT Analysis Strengths Devices that are compatible with any global mobile carrier. Superior security for consumer protection, fully integrated capability for corporate Virtual Private Networks. Offers expandable memory capability, preventing consumers from having to buy new devices. Weaknesses Only niche market loyalty – the corporate consumer. Lack of focus on innovation and R&D. High dependency on government contracts that make up the majority of sales revenues. A stock value of only $9.95 as of 14 December, limiting capital procurement opportunities (Yahoo! Finance 2014). Opportunities Strategic alliances and joint ventures to improve R&D competency and capability. Replicate existing competitive product features and benefits Diversification of product portfolio to offset smartphone business losses. Utilise penetration pricing to capture new market interest. Threats A more frugal UK post-recession consumer scaling back high cost purchases (McDougall 2011). A centralised business structure not conducive of collaboration Rapid change in the technological environment further shortening product life cycles. Lack of shareholder confidence. Figure 3: Stock performance of Blackberry – 2010 through 2014 Source: Yahoo! Finance. 4.3 Porter’s Five Forces Buyer power and competitive rivalry are the most significant threats to Blackberry. In this industry, there are many competitors in the saturated UK market. Products by such companies as Nokia and HTC (as two examples) can offer lower-priced products with comparable features and benefits to Blackberry, Apple and Samsung. This gives price-sensitive consumers much less switching costs, important in a market with frugality and thrift becoming a chic consumer trend (Flatters and Willmott 2009). In terms of competitive rivalry, Apple understands consumer needs and lifestyles and utilises advertising strategies that are designed to build close relationships to the Apple brand. Goodson (2011) asserts that Apple’s executive-level transparency, use of interactive social media to engage customers, and showing the firm’s values and beliefs are building superior loyalty. Blackberry does not maintain these close relationships, with emphasis on professionalism as it pertains to the corporate client, thus limiting its competitive rivalry advantages. Apple and Samsung can capture more markets through lifestyle promotions. Threat of new entrants is not significant for Blackberry. It takes monumental financial capital to enter new markets, establish production capacity, develop a potent value chain, and establish a supply chain capable of giving a firm cost leadership advantages or procure unique technologies. Supplier power is also not largely relevant for Blackberry as the global supply chain and technologies available for production are available to all major smartphone producers. Switching costs for suppliers are high. Threat of substitutes is moderate for Blackberry, as consumers can use personal computers and televisions for their multi-media needs and many companies are offering tablets as a substitute for the smartphone. However, with growing consumer expectations for mobility, it is unlikely that a trend will emerge driving consumers segments back to personal computers rather than smartphones. 4.4 PESTLE Analysis Political A free market UK economy supportive of business autonomy Anti-collusion laws preventing limitation of production or price fixing to gain competitive advantage. Economic Austerity packages stemming from government creates uncertainty in consumer employment and disposable incomes. A favourable exchange rate compared to U.S. dollar for UK sales viability. Social More consumers using social media daily, drawing more sales of smartphone devices. Thrift and frugality with post-recession consumers leading to uncertain spending trends. Technological Rapidly evolving technologies and an infrastructure of supply giving no advantages to smartphone producers. Defecting Blackberry software chief seeking employment at Apple leading to litigation to protect Blackberry technology secrets (CBC News 2014). Legal Tax breaks for foreign businesses operating in the UK Start-ups infringing on patents to launch their own technology products (Mashable 2014). Environmental Increasing UK regulations for safe disposal of smartphones and utilisation of non-toxic raw materials. 5. Assumptions Stock value increase difficulties – Shareholders that witnessed losses will have minimal confidence in Blackberry’s future strategic achievements that will limit capital availability immediately until sales growth proves growth opportunities. Culture change problems – The centralised structure will likely experience change resistance to create more horizontal decision-making and collaboration for innovation production. Such resistance could conflict becoming an innovation-focused business model. 6. Marketing objectives Launch a revolutionary new product within the established competitive market. Build brand preference with the new consumer segment of 25 to 30 year-olds. Blend a dual positioning strategy that emphasises innovation and the end user. 7. Strategies for new product Consumer demand for accessing and using social media is growing at an explosive rate in the UK. Google (2011) asserts that 76 percent of UK consumers use their smartphones for this purpose, with younger consumers using this more often. Whilst competing products allow for Internet access, none are devoted to functionality associated with social media as a primary function. Blackberry will be developing the Blackberry Social One, a smartphone with typical features and benefits, but providing Blackberry-paid, free access to hundreds of dominant social media websites. Purchase of the social one will allow users to connect to other users’ smartphones using interactive applications when their friends provide the serial number and other relevant data from their own handheld devices. This device-to-device connectivity will enhance communications both within and outside the social networking environment. Holography technology will allow connected users to send videos which can be holographically projected on virtually any surface. Holography will also include display of social media communications via a projection port similar to the smartphone camera systems. This will be developed in a strategic alliance with leading holography developers. 8. Promotional programme Holographic capabilities are revolutionary in this industry. The company will utilise a holistic IMC strategy that targets the 25 to 30 year-old market (and other markets) that focus on innovation of this new technology. The promotional campaign will involve gaining contracts with Walt Disney Company, the intellectual property holder of Star Wars, using the famed R2D2 character that maintained holographic technologies. Figure 4 illustrates the promotional concept. Figure 4: Promotional strategy (print and television) for the Blackberry Social One Blackberry’s “The Future is Now” campaign will be run on UK television one month prior to launch in order to stimulate higher revenue growth in pre-ordering and for added publicity. This campaign will be supplemented with print advertising in technology magazines in the UK also one month prior to launch of the Social One. Table 1 illustrates the anticipated budget for this campaign: Table 1: Promotional budget Activity Budget Production of television commercial £500,000 Intellectual property licensing for Star Wars utilisation £3,500,000 Print Advertising £750,000 Administrative costs £75,000 Television run costs £1,800,000 Total £6,625,000 The message of the promotional campaign is enhancement of the social condition through innovation. It is anticipated that this revolutionary technology will capture the attention of more than just the 25 to 30 year-old market, but be a high demand item in a market with no competitive products offering this holography technology. The company, benchmarking Apple, will also have transparent executives and internal product developers (and strategic alliance partners) holding press conferences one month prior to launch illustrating the holography technology. Using relevant actors fitting the 25 to 30 year-old demographic, the company will hold webinars showing a scripted scene of these actors using the holographic and interactive technology for social media and illustrate the emotional and socio-psychological impact of a new functional smartphone capability. Those consumers that are highly considerate of the benefits of their social position in society will likely have more attachment toward the Blackberry brand as iterated by Zhang and Chan (2009). References Amazon.com. (2014). Blackberry Passport – Factor Unlocked Smartphone – Black. [online] Available at: http://www.amazon.com/BlackBerry-Passport-Factory-Unlocked-Smartphone/dp/B00NET0PVI (accessed 9 December 2014). Apple. (2014). Bigger than bigger. [online] Available at: http://store.apple.com/uk/iphone (accessed 8 December 2014). Baines, P, Fill, C. and Page, K. (2008). Marketing. Oxford: Oxford University Press. Blackberry. (2014). Blackberry Limited Annual Report for year ended 1 March 2014. [online] Available at: http://www.annualreportowl.com/Blackberry/2014/Annual%20Report (accessed 6 December 2014). Blackberry. (2014). Blackberry smartphones: a short history of the Blackberry. [online] Available at: http://www.bbscnw.com/a-short-history-of-the-blackberry.php (accessed 4 December 2014). Blackberry. (2012). Blackberry 2011 Annual Report. [online] Available at: http://us.blackberry.com/content/dam/bbCompany/Desktop/Global/PDF/Investors/Documents/2011/2011rim_ar.pdf (accessed 8 December 2014). Blackberry. (2008). Research in Motion 2008 Annual Report. [online] Available at: http://www.docstoc.com/docs/7488753/Research-in-Motion-Annual-Report (accessed 3 December 2014). CBC News. (2014). Blackberry sued software chief to stop him for leaving Apple. [online] Available at: http://www.cbc.ca/news/business/blackberry-sued-software-chief-to-stop-him-leaving-for-apple-1.2587382 (accessed 7 December 2014). Chaudhuri, A. and Holbrook, M. (2001). The chain of effects from brand trust and brand affect to brand performance: the role of brand loyalty, Journal of Marketing, 65(2), pp.81-93. Flatters, P. and Willmott, M. (2009). Understanding the post-recession consumer, Harvard Business Review, July. [online] Available at: https://hbr.org/2009/07/understanding-the-postrecession-consumer/ar/1 (accessed 11 December 2014). Goodson, S. (2011). Is brand loyalty the core to Apple’s success?, Forbes Magazine. [online] Available at: http://www.forbes.com/sites/marketshare/2011/11/27/is-brand-loyalty-the-core-to-apples-success-2/ (accessed 10 December 2014). Google. (2011). Global perspectives: the smartphone user & the mobile marketer. [online] Available at: http://www.gstatic.com/ads/research/en/2011_Google_MMA_Global_Perspectives.pdf (accessed 11 December 2014). GSM Arena. (2014). Apple iPhone 6. [online] Available at: http://www.gsmarena.com/apple_iphone_6-6378.php (accessed 7 December 2014). GSM Arena. (2014). Blackberry Z3 goes on pre-order, specs finally detailed. [online] Available at: http://www.gsmarena.com/blackberry_z3_goes_on_preorder_in_indonesia-news-8396.php (accessed 7 December 2014). Kalyanaram, G. and Gurumurthy, R. (2008). Market entry strategies: pioneers versus late arrivals, Wright University. [online] Available at: http://www.wright.edu/~tdung/entry.pdf (accessed 6 December 2014). Marketing91. (2014). Marketing mix of Samsung Galaxy. [online] Available at: http://www.marketing91.com/marketing-mix-samsung-galaxy/ (accessed 7 December 2014). Mashable. (2014). Blackberry sues Ryan Seacrest’s startup over iPhone keyboard. [online] Available at: http://mashable.com/2014/01/03/blackberry-lawsuit-ryan-seacrest/ (accessed 8 December 2014). McDougall, A. (2011). Innovation vital to change post-recession consumer behaviour, Mintel, Cosmetics Design Europe. Available at: http://www.cosmeticsdesign-europe.com/Market-Trends/Innovation-vital-to-change-post-recession-consumer-behaviour-Mintel/ (accessed 8 December 2014). MED. (2008). How to market to the over-looked 25 to 34 year-old age segments. [online] Available at: http://www.marketing-execs.com/news/11-08/2.asp (accessed 7 December 2014). Mercader, V. (2014). Samsung Galaxy S5 vs LG G3 Review: comparison of specs, features, price, The Christian Post. [online] Available at: http://www.christianpost.com/news/samsung-galaxy-s5-vs-lg-g3-comparison-of-specs-features-price-131210/ (accessed 7 December 2014). Paul, D. (2013). The importance of brand in technology purchasing – UK: Mintel Report, Mintel Group Ltd. Samsung. (2014). Samsung Galaxy Note 4. [online] Available at: http://www.samsung.com/global/microsite/galaxynote4/note4_specs.html (accessed 7 December 2014). Statista. (2013). Number of smartphone users in the United Kingdom from 2011 to 2017. [online] Available at: http://www.statista.com/statistics/270821/smartphone-user-in-the-united-kingdom-uk/ (accessed 8 December 2014). Styles, K. (2013). 7 in 10 people in the UK now own a smartphone, Mobile Marketing. [online] Available at: http://mobilemarketingmagazine.com/7-10-people-uk-now-own-smartphone/ (accessed 5 December 2014). TechSci Research. (2012). UK smartphone market will continue to soar ahead. [online] Available at: http://www.techsciresearch.com/1811 (accessed 7 December 2014). WordPress. (2011). UK smartphone stats. [online] Available at: http://txt4ever.wordpress.com/tag/uk-smartphone-stats/ (accessed 10 December 2014). Yahoo! Finance. (2014). Blackberry Limited (BBRY). [online] Available at: http://finance.yahoo.com/echarts?s=BBRY+Interactive# (accessed 8 December 2014). Zhang, H. and Chan, D. (2009). Self-esteem as a source of evaluative conditioning, European Journal of Social Psychology, 39, pp.1065-1073. Read More

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