Use of Marketing Techniques to Create Positive Perception: BlackBerry - Essay Example

? BlackBerry Use of Marketing Techniques to Create Positive Perception Contents Contents 1. Introduction 2 2. Definitions of Market Segmentation 2 3. Types of Market Segmentation 3 4. Market Segmentation employed by Blackberry 4 5. Factors that add Value to Customer Satisfaction 5 6. Conclusions 5 7. References 7 8. Appendix I 8 9. Appendix II 9 10. Appendix III 10 1. Introduction When Adam Smith developed the idea of specialization, little did he know that he was laying the foundation stone of prosperity for adherents. In a way, segmentation is a step further from specialization, for segmentation is the grouping together of a company’s customers according to discernible similar characteristics that allows the company to better serve the market niche, while specialization is the concentration of labour in a special area that leads to increase in production and efficiency. Kotler (1991) goes further when he said segmentation is the subdividing of market into homogeneous sub-set of customers, where any subset may conceivably be selected as market target to be reached with distinct market mix. A Nigerian Politician in a campaign speech said, “Vote for the present IT literate generation, not the old generation who still thinks that Blackberry is a kind of fruit” (El-Rufai, 2010). The truism of this statement underlies the success (Appendix I – III) of Blackberry. Made by Research in Motion since 1999, it is one of the smartphones that incorporates different features such as email, PDA, WiFi, etc. The success of Blackberry phones is seen in the Appendix I which shows the increasing revenues throughout the fiscal year 2009. Today, most phone manufacturers have copied the features of Blackberry phones in other to tap into the lucrative market being enjoyed by Blackberry. Nokia, Samsung, LG, among others have all departed from their traditional call phones to smartphone technology being pioneered by Blackberry. 2. Definitions of Market Segmentation To fully understand market segmentation, several definitions by scholars and experts will be analyzed. Market segmentation consists of taking the total heterogeneous markets for a product and dividing it into several sub-markets or segments, each of which tends to be homogenous in full significant aspects (Stanton, 1981). According to American Marketing Association, “Market segmentation refers to dividing the heterogeneous markets into smaller customer groups having certain homogenous characteristics that can be satisfied by the firm” (Jain, 2010). The foregoing definitions are going to point out that segmentation is a valuable strategy to be adopted by firms that want to increase their market shares and revenues. According to Bose (2010) good market segmentation must have the following qualities: accessible to the firm, for instance, if the law prohibits the firm from exporting, you cannot have a market segmentation based on an overseas market. It should be sustainable, the returns from the market should be enough to justify the profit target of the firm and the investment made in the market. If the segment does not justify its profit target, it makes no economic sense. Also, it must be measurable. The size and purchasing power of the members of the segments should be known. Finally, the segment should be responsiveness, that is, the market should respond positively to the firms marketing strategies. According to Dibb and Simkin (1997) a range of benefits arise from the market segmentation. First, the process puts customers first, maximizes resources and emphasizes strengths over competitors. Also, it leads to a more focused company culture and the building of inter and intra organizational relationships. According to Beik and Buzby (1973), the concept of market segmentation may be used for strategic alignment of the firm’s productive capacities with its existing and potential markets. 3. Types of Market Segmentation Market segmentation can generally be classified into 4 broad categories, viz: Geographic, Demographic, Psychological and Behavioural. Geographic segmentation divides the market by regions, locality, states, urban areas, suburbs, villages, etc. This seeks to divide the market according to the locality of the customer. On the other hand, Demographic segmentation bases the grouping according to individual characteristics such as age, income, education, occupation, family size, sex, etc. for instance, certain products may be more favoured by the youths more than the elderly. Blackberry for instance, is a smartphone favoured by business people who want value for money, and are ready to pay. In segmenting by Demographic factors, marketing strategy should focus on business people and the young, not the elderly, who have no apparent use for the Blackberry phone. Psychographic segmentation divides the market according to factors such as personality class, consciousness, and perceived risks. Other factors are life styles, values, motivations etc. Behavioural segmentation considers such factors such as usage, benefits sought or derived, reasons for purchase etc. factor such as usage can be further classified under light, medium or heavy users. 4. Market Segmentation employed by Blackberry Basically the marketing and pricing of Blackberry phones can be considered to be targeted at business people and high income bracket. Segmentation has been recognized as a marketing strategy which focuses on the customer (Porter, 1980). The success of Blackberry shows that the marketing strategy being employed by the firm is achieving desired results. From the analysis of market segmentation above, it can be seen that a combination of market segmentation is in use at Blackberry. First, the market is segmented according to demography. Factors such as income and regional segmentation play an important role. Blackberry smartphones are built for high end users such as business people. Due to the cost of materials, used in them and the features the present, the market prices of Blackberry phones are higher than the traditional phones, hence, the segmentation to higher income bracket. Also, there is geographical segmentation in terms of regional segmentation. Regional segmentation here does not mean East or West, but has more to do with economies of the World. Blackberry phones are neither in Sudan, Somalia, and other economically distressed regions of the World. Since Blackberry manufacturers understands that it is not possible to satisfy all the markets in the whole world, due to this, several kinds of the same model are produced for different markets. For instance, the Blackberry Storm on sale in the US, is quite different from the model being sold in Nigeria. This is because of different economic status of the two countries. Consumers in the US, are generally considered more wealthy than their Nigerian counterparts, hence, the segmentation of the markets to ensure that both markets enjoy the same products, albeit with different qualities. According to Sun (2009) geographic segmentation calls for dividing the whole market into different geographical regional units, such as countries, states, regions, counties, towns, or streets. 5. Factors that add Value to Customer Satisfaction The blackberry phones are packaged with added features that add value to customer satisfaction. Features such as email capability, surfing the web is much easier with QWERTY keyboard, normal phone calls, Simple shortcuts made possible by touch screen, email attachments and supports, different contracts such as PayG, SIM free, social Network sites such as facebook, myspace, twitter, GPRS, EDGE, USB interface, large screen, cool sleek and stylish look, high resolution camera etc. 6. Conclusions All the foregoing features of Blackberry smartphone provide added value for money, and customers are willing to pay the extra dollars to enjoy these features. From the Appendices, I – III, it can be seen that Blackberry has enjoyed tremendous success since its inception. Today, it controls over 14% of the smartphone market, and it ships more than any other phones in the US, Canada and Europe, this fact can be attributed to economic advancement of these regions. Still, much can still be done, for Nokia, is still the leading maker of phones in the world, and to overtake Nokia, makers of Blackberry phones, have to diversify into cheaper products, and also outsource major production to China and other countries of the World, where cheap labour are available. 7. References Beik, L. L. and Buzby, S. L. (1973) Profitablity Analysis by Market Segments. The Journal of Marketing. Vol. 37, No. 3 (July) pp. 48-55. Bose, C. (2010) Modern Marketing: Principles and Practice. India: Phi Learning. Dibb, S. and Simkin, L. (1997) A Program for implementing Market Segmentation. Journal of Business and Industrial Marketing. Vol. 12 Iss: 1, pp. 51-65. El-Rufai, N. (2010) Quit Presidential Race Now, El-Rufai Tells Buhari, Ibb. Available at www.sunnewsonline.com/webpages/news/national/sept/30 Jain, A. (2010). Principles of Marketing. New Delhi: FK Publications. Kotler, P. (1991). Marketing Management. 7th ed., New Jersey: Prentice-Hall Inc. Porter, Michael, E. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press. Stanton, W. J. (1981). Fundamentals of Marketing. 6th Edition. New York: McGraw-Hill Inc. Sun, S. (2009). An Analysis of the Conditions and Methods of Market Segmentation. International Journal of Business and Management. Vol. 4, No. 2 February. Available at www.ccscnet.org/journal.html 8. Appendix I Blackberry Revenue Figure for 2009 $billion 5 4 3 2 0 Q1 Q2 Q3 Q4 Total Sales in Units 31.1m 9. Appendix II Shipment figures for iPhone, RIM, and Android Source: http://gigaom.com/mobile/comparing-android-phone-shipments-with-iphone-blackberry/ 10. Appendix III Company Summary Type Public TSX: RIM NASDAQ: RIMM Industry Telecommunications Wireless handheld devices Communication products Founded Waterloo, Ontario (1984) Headquarters Waterloo, Ontario, Canada Area served Worldwide Key people Mike Lazaridis (President, Founder & co-CEO) Jim Balsillie (co-CEO) Don Morrison, Thorsten Heins (COO) Products BlackBerry BlackBerry Enterprise Inter@ctive pager Revenue $14.953 billion (2010) Operating income $3.237 billion (2010) Net income $2.457 billion (2010) Total assets $10.204 billion (2010) Total equity $7.602 billion (2010) Employees 14,000 Website http://www.rim.com Read More