The management strategy of Blackberry - Essay Example

? Blackberry Marketing Programme and Environment Introduction Blackberry is a major player in the smart phone and mobile email markets around the world. The brand was designed and developed by the Canadian firm Research in Motion (RIM) and has been operational in the smart phone markets since 1999 (RIM, 2012). The typical Blackberry device is created to function as a personal digital assistant, portable media player, internet browser, gaming device and many other similar functions. The largest competitive advantage available to Blackberry devices in comparison to other smart phones is their ability to send and receive push email and instant messaging while preserving a lot of security through patented encryption methods. Typical Blackberry devices support many instant messaging features including the Blackberry Messenger. 2. Macro and Competitive Environments For the fiscal year 2011, Blackberry sales accounted for 3% of all mobile device sales around the world. This makes RIM the sixth most popular device manufacturer in the world, as 25% of all mobile devices manufactured in the world are smart phones (Gartner, 2011). The trademark Blackberry Internet Service is offered in 91 countries through some 500 mobile service operators who provide differing mobile technologies (Blackberry, 2010). An estimate from October 2011 places the number of global Blackberry subscribers at 70 million (Colapinto, 2011). The greatest market penetration of Blackberry smart phones is in the Caribbean and Latin America with market penetration levels of up to 45% in the region (Nation News, 2011). However, the market penetration of Blackberry devices is decreasing around the world especially in the North American market. The last quarter of 2010 saw a three percent decrease in Blackberry sales from 19.7% to 16.6% in the United States market. The changes to Blackberry’s sales are coming largely due to competition from Apple’s iPhone and Google’s Android based smart phones. The overall international picture for Blackberry seems to be waning but the brand is trying to hold strong in the British and Canadian markets where Blackberry is gaining ground. Trending by ICM Research on hardware sets in the United Kingdom shows that Android has the largest market share at 13% followed by Blackberry at 10% with Apple lagging behind at 9% while Windows Phone stands at a measly 1% only. The British market is also seeing a general increase in smart phones in the overall mobile phone market. Within this scope of expansion, the share of RIM increased by 4% while Apple expanded by 2% to their overall market share. However, these increases pale in comparison to strides by Android that grew to twice its previous market size. The increase from Android’s end can largely be attributed to mid-range headsets manufactured by HTC and Samsung that are also supporting Windows small market share (Brill, 2012). Blackberry’s and its competition’s overall market share reveals a lot given that Blackberry stands at 22.3% of the smart phone market while Android stands at 45.2% with Apple lagging behind at 18.3%. When these figures are compared to the market growth rates reported previously, it becomes clear that Blackberry’s greatest competition stems from Android. In order to find a better marketing scheme it is necessary to study why Blackberry is losing to Android in certain areas and gaining in others. While Blackberry is losing fast to competition from Android around the world, but consumers in Spain and the United Kingdom are holding strong to Blackberry. The youth market is supportive of Blackberry because of the large volumes of text messages and instant messaging services used by them. The primary usages of young consumers are messaging services that are harder to use in conventional handsets when compared to smart phones such as Blackberry. One major advantage available to Blackberry when compared to Android is the trademark QWERTY physical keyboard that is standard to all Blackberry devices but is available to only a few Android phones. The ease of access and use offered by the physical keyboard is undeniable when put in context of messaging services such as text messaging or instant messaging. While the physical keyboard argument is applicable to the international market, there is another distinct advantage available to Blackberry users in the United Kingdom when compared to Android. Blackberry offers a free messaging service in the form of the Blackberry Messenger that appeal to the youth who are often on a restricted budget. Moreover, the base price for Blackberry smart phones is lower than that for Android powered devices although the gap is fast closing down. When youth converts to smart phones on a limited budget, the primary choice available to most is to buy a Blackberry rather than a more expensive Android device (Dunn, 2011). The PESTLE analysis for Blackberry is provided below to elucidate the major components of its market standing. Political: The United Kingdom government has provided incentive to Blackberry by using their smart phone to handle governmental functions. A new move is being directed to equip government officials with Blackberry devices so that they can respond better to public queries. Economic: The youth represents the biggest buyers of Blackberry given their limited budgets and the relatively lower prices of Blackberry smart phones. Social: Blackberry offers a free messaging service in the form of Blackberry Messenger that appeals to both the youth and females which ensures brand loyalty. Technological: Blackberry is still the preferred solution for push messaging services. Legal: Blackberry ensures a unique encryption scheme that provides better security to people’s data. Environmental: Blackberry has a competitive environmental policy that is comparable to its competitors. 3. Current Marketing Programme Elements Around eight five percent of Blackberry’s new sales originated from consumers that were previously using conventional mobile phones such as Nokia, Samsung, LG etc. Within these upgrading consumers, the majority of buyers were women whose conversion to Blackberry stems from its seamless texting capabilities. When Blackberry is compared to other smart phones, its capabilities for push instant messaging are undeniable because this is the device’s main selling point and focus. Furthermore, text messaging and other instant messaging applications on all mobile phone and handset platforms are known to be more attractive to female consumers when compared to male consumers. This is even truer for more young consumers within their twenties and thirties where female consumers prefer phones that offer easier messaging interfaces. The trends presented above form a restricted picture as to Blackberry’s current standing in the United Kingdom. Blackberry’s current marketing mix needs to be analysed in detail to delineate the strength of its current marketing programme. 3.1. Product Blackberry only offers a standard smart phone product that is easily recognisable given their physical QWERTY keyboards. The high-end models feature touch features that may be limited to a few on screen buttons or the entire screen. In terms of quality, Blackberry offers competitive battery life as well as usability although the total internal memory available to users is low when compared to the competition. Blackberry devices also tend to offer more refined and well finished product quality (such as the use of leather backsides and pouches) which are not available to any other market devices. Additionally, Blackberry offers an easily navigable interface that is intuitive to youth and older users alike because the menu offers simple navigable buttons and a comprehensive help menu. When compared to Symbian systems such as Nokia or to full touch sensitive devices such as Android, Blackberry is more user friendly as some expertise is required to operate other competitive devices. However, the greatest selling point available to Blackberry is its free instant messaging service especially when put in context of the United Kingdom market. The United Kingdom market proves that if Blackberry could offer similar services in other markets, it would be possible to increase Blackberry’s share there as well. 3.2. Price When Blackberry’s pricing mechanism is investigated, it becomes clear that the average price for a Blackberry device is around 30% lower than that for an Android based device and around 50% or more lower for Apple’s iPhone lineage. Given this large difference, it is easier for people switching from conventional cheaper handsets to Blackberry devices. In addition, the pricing mechanism for Blackberry is as flexible as for the competition when put in context of carrier offerings. Given that Blackberry smart phones are cheaper, the average instalment per month for a Blackberry device is often 50% lower than that for an Android device. 3.3. Promotion Blackberry’s promotional activities are comparable to those of its competition in the United Kingdom with a few minor differences in certain marketing segments. Blackberry chooses to use internet as well as television and print media in order to further its products much like the competition. In recent years, the move to market through the internet has gained more popularity at RIM largely because the end consumers are largely youth who are more easily targeted using the internet. Moreover, the internet marketing mix involves the extensive use of social networking websites such as Facebook, Twitter and the deployment of Google’s Adwords in order to reach larger audiences. Blackberry has also shown greater flexibility than certain other sellers such as Windows Phone by learning about its target segment and then responding to their requests accordingly. In order to reach their target audience in the corporate world, Blackberry has chosen to adopt social networking through a new blogging service (Soltys, 2010). The contention is to reach out to professional users of the Blackberry service to gain their trust. 3.4. Placement Blackberry sports a near flawless supply chain mechanism that ensures that stores are well stocked and smart phones are readily available to consumers around the United Kingdom. However, Blackberry lacks in reaching out physically to the target audience when compared to the competition such as Apple. Apple’s stores are located conveniently throughout United Kingdom and offer potential users the opportunity to use a device before they buy it. This exposure is unavailable to potential Blackberry users who must rely on feedback from their social group or on reviews placed on the internet. 4. Revised Marketing Programme Elements The decline in Blackberry’s share in the international market means that Blackberry needs to review their current business strategies to gain greater market advantage. The primary issue that needs immediate attention is the limited range of products offered by Blackberry that rely on the physical QWERTY keyboard alone. When other market competitors are looked at, it becomes clear that they offer QEWRTY keyboards with a few devices only (except for Apple that has no QWERTY keyboard device). Even if Blackberry plans to stick to its physical QWERTY keyboard as a major selling point, it would still be wise to look into other sectors such as tablets, touch screen smart phones and the like. Although Blackberry is trying to move in this direction such as with the introduction of its Blackberry Playbook tablet but such products have resulted in failure due to lack of consideration for the market’s base modalities (Gizmodo, 2010). The failure has largely stemmed because of Blackberry’s insistence on using its patented operating system with the tablet that did not sit well with consumers who compare it to Android. Before Blackberry, Nokia made the fatal mistake of persisting with its Symbian operating system while the market shifted over to more usable platforms such as Windows Mobile and Android. Realising its mistake, Nokia has dropped the use of Symbian and is instead switching over to Windows Mobile and Android as the preferred operating systems. It is high time that Blackberry began to look at synergy as a means for furthering its smart phones because it lost $1.5 billion with the tablet (roughly 2% of RIM’s annual profits). Another major direction that Blackberry needs to look into is offering customers more exposure to their devices. This could be carried out using physical stores such as the Apple store that offer customers a chance to use the actual device before buying it. The enhanced exposure to Blackberry’s devices would not only increase the sales volumes but would also increase market penetration into potential customers who would be more interested in Blackberry smart phones once they use one physically. Given also that Blackberry’s largest consumer base stems from youth and particularly female youth, it would be advisable for RIM to introduce product finishes that go accordingly. Currently certain Blackberry smart phones are finished in expensive materials such as leather to provide a professional look. Moreover, the range of colours offered with Blackberry are few while the casings cannot be changed either. If Blackberry would start to finish its smart phones in simpler materials with more colour and youth appealing logos and symbols, there would be greater chances that youth would look into Blackberry devices as “fun” to buy and use. It would be even better if Blackberry would offer customisation such as additional casings and skin covers that are not currently offered. With these changes in place, the price of Blackberry smart phones would decrease and would reflect market realities better. The decrease in the price of Blackberry devices further would allow more young users to afford Blackberry devices thus generating better sales and service volumes. Another major allegation often levelled at Blackberry is the lack of “apps” that are otherwise easily available for other smart phones such as iPhone, Android and Windows Mobile. This can be attributed to Blackberry’s differentiated operating system that would require the interest of developers to initiate app making. However, Blackberry has been slow to provide its SDK (standard development kit) to developers and has remained lacklustre in giving developers incentives to create apps for Blackberry devices. As a result, the competition in terms of Android and iPhone has developed hundreds of thousands of apps that appeal to the potential smart phone user. One of the biggest advantages in using a smart phone is the ability to use varied apps for various purposes but Blackberry’s slow response to change has made it unattractive for many users switching to smart phones from conventional handsets. The same argument stands true for many users switching between various smart phone operating systems. 5. Bibliography Blackberry, 2010. Global Coverage. [Online] Available at: HYPERLINK "http://www.blackberry.com/support/countries_of_availability.shtml" http://www.blackberry.com/support/countries_of_availability.shtml [Accessed 18 February 2012]. Brill, M., 2012. UK smartphone market share: iPhone, Android & BlackBerry. [Online] Available at: HYPERLINK "http://txt4ever.wordpress.com/2011/06/03/uk-smartphone-market-share-iphone-android-blackberry/" http://txt4ever.wordpress.com/2011/06/03/uk-smartphone-market-share-iphone-android-blackberry/ [Accessed 19 February 2012]. Colapinto, J., 2011. Famous Names. 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