Blackberry Products - Report Example

Table of Contents Executive Summary 3 Table of Contents 1 (Wray, 2009) 9 II.Research Objectives 9 After conducting secondary research on Blackberry and the smart phone industry in the UK, HUES Agency discovered research problems which needed to be addressed. In order to keep Blackberry in its strong market position, a study with the following objectives was conducted: 9 III.Research Methodology 10 1.Secondary Research 10 2.Primary Research 10 2.1 Qualitative Research 11 2.1.1 Focus Groups 11 2.2 Quantitative Research 12 2.2.1 Survey 12 3.Data Preparation 12 1.Data Analysis 13 IV.RESULTS & FINDINGS 13 1.Qualitative Research Findings 13 1.1Focus Group 13 2.Quantitative Research Findings 15 V.Limitations 27 VI.Conclusion and Recommendations 27 VII.Appendix 31 Executive Summary This Market Report looks at the cell phone industry in the UK. The market is influenced by technology and it is of core importance that the concerned companies should stay updated with the progress and future trends that shape up the entourage around the market. The market is extremely volatile and unexpected innovations can do wonders for a company. A few years ago, Samsung was a relatively unknown brand in the market but last year in 2012 it made record sales and proved to be the most successful company in terms of sales. The report also examines the changing habits of consumers and how it has changed the way people now communicate. Applications like BB messenger and WhatsApp have allowed people to communicate across border totally free of cost. Consumers now look to purchase smartphones that has caused a sudden change in the mobile phone market. Samsung, Apple and HTC are coming up with innovative products that are much desired by the consumers. Blackberry has lost considerable amount of shares due to its lack of innovativeness and is suffering just like Nokia and Motorola. Smartphones applications such as angry birds are the latest tools to add excitement in a smartphone user. These types of applications are most suited in fully touch screen phones like HTC, Samsung and iPhone. This is one area where Blackberry has not worked on over the past few years and has been deeply wounded. As technology advances, the market is going to be even more competitive in the future. Previous trends have shown that the company that brings innovativeness in its products eventually succeeds. Blackberry is at a standstill at the moment where it is losing shares not only in the European market but also all the other markets including the North American and Asian. The Research carried out by HUES Agency proves that the company is only to blame itself because of the lack of creativity put into its products and promotional strategies. While its competitors are always looking to improve, it is yet to be seen what Blackberry comes up to add value to its products in the near future. Market Research Report- (Blackberry) I. Introduction 1. Market Overview The UK mobile market had a subscription of around 83 million users by the end of 2012 compared to 81% total users in 2011. Out of the 83million subscribed users, 40 million had subscribed to 3G services and just fewer than 44 million users had subscribed to basic packages of calling and texting (Sedghi, 2012).The figures show a rise in subscription to 3G services by 4% in the year 2012. In the same year, the total amount of time spent by a person on making and receiving calls was around 6%. About 4% of the people living in the UK rely on cell phones to use internet (BBC, 2012).This increase has mainly been because of the advent of smartphones and their popularity among users. Ownership of tablets has increased from 3% to 12% in the 2012. 79% of the people claim to go online at least once every day. It is estimated that every three out of 4 people will own a smart phone by 2016 alone in the UK (European Scrutiny Committee, 2011, p. 206). (Wray, 2009) 2. Competitors Analysis There has been an increase in the usage of smartphones in the UK. Nearly half the population of the cell phone users now use smart phones which are predicted to rise as stated before. Apple’s iPhone leads the market with 30% of total share of the smart phone market. Samsung has managed to gain popularity and now is the second favourite choice holding 20% market share. Blackberry and HTC are evenly matched with 17%and 16% market shares respectively (The Telegraph, 2012). Fig. 2 Total Market Share (Arthur, 2011) Fig. 3 Blackberry Current position (Arthur, 2011) 3. Consumer Attitudes It is estimated that on average a person living in the UK sends 50 messages and is believed to send 150 billion text messages a year. About 2 hours every week is spent on using internet and browsing online (Ling, 2004). Consumer’s attitude and behaviour have changed due to these recent trends and communications take place online for example through BB and WhatsApp Messenger rather than making direct phone calls. The number of phone calls made decreased by just fewer than 2% for the first time ever since the emergence of these new trends. The most involved in these trends are teenagers who make up a big market of smartphones (Dredge, 2013). Smartphones are changing the way people shop now as 50% of them admit they use their devices on online bargain hunting when out shopping. Nearly 7% of the people living in the UK use internet connected smart phones on their TV to watch movies or play video games online (Hartmann, 2008). This new technology is shaping the way they view entertainment. According to James Thickett (Research director for Ofcom) “The forms of communications have changed as smartphones technology continues to progress. We no more interact face to face on frequent basis and let our thumb on the smart phones do all the talking” (Castells, 2007). (Wray, 2009) II. Research Objectives After conducting secondary research on Blackberry and the smart phone industry in the UK, HUES Agency discovered research problems which needed to be addressed. In order to keep Blackberry in its strong market position, a study with the following objectives was conducted: To find what distinctive attributes can Blackberry offer to its customers. To draw out the factors that influence customers to buy Blackberry products over competitors’ products. To penetrate how Blackberry can gain more market shares in the UK. To find ways in which Blackberry can continue to innovate to maintain its leading market position. III. Research Methodology In this exploratory research report qualitative and quantitative data was collected, organised and then analysed, based on the research objectives. Both of the methods adopted have been explained below. 1. Secondary Research The secondary research data was collected from books, company websites, online resources, newspapers and journal articles. Collecting this data provided HUES Agency with an insight of the smartphones market in the UK and helped identify the main competitors and the customer behaviour trends in that market. It also resulted in discovering several research problems which then lead to creation of research objectives. 2. Primary Research HUES Agency gained a greater understanding of the identified problems through relevant consumer beliefs, behaviour, attitudes and opinions which were collected by conducting observations, focus groups and a survey. 2.1 Qualitative Research Qualitative research had been carried out to define the research problems and to support the formation of quantitative research. Due to the limitations of the secondary research findings, observations and focus groups were conducted to gain a better perspective from people who have a high level of interest in this category. 2.1.1 Focus Groups Two focus groups were conducted to obtain and understand several points of view from different people who bought and used smartphones according to their needs. Each focus group was conducted in Westminster Business School at the Marylebone Campus and composed of homogenous participants aged between 18 to 35 years. For the first focus group conducted on the 13th of February, 2013 participants were selected based on their age, interest and frequency of purchasing smart phone products. The focus group lasted 60 minutes and was recorded by audio and video which was later analysed. A discussion was done on the consumer behaviour and attitudes towards buying smart phone products and questions were asked based on the research objectives to the participants. After the first focus group, Hues Agency understood that it needed to select the participants based on more detailed criteria. The second focus group was conducted based on the same discussion, on the 15th of February, 2013 and participants were selected based on a narrower pre screening criteria. 2.2 Quantitative Research Quantitative research data was collected by sending out an online survey. A statistical analysis was then carried out using the SPSS software. 2.2.1 Survey HUES Agency selected to use an online survey website (surveymonkey.com) as there was a time constraint and also additional time was saved in creating, distributing and analysing information to reach out to a wider range of customers who were appropriate for the research. The judgemental random sampling method was adopted and each member of HUES Agency selected people aged between 18 and 35, who had and interest or bought smartphones products in the UK. Based on the findings from the observations and focus groups, HUES Agency designed a questionnaire in order to obtain quantified information from customers regarding their behaviour towards smartphones. HUES Agency approximately used 14 close ended questions with nominal and scale measurements, in order to analyse and compare the different options between them. Initially, a pilot questionnaire was sent out to 20 people to check its effectiveness before a final one was sent out to 300 selected respondents. Filter and interval scale measurement questions were then added to the final questionnaire in order to have a more effective analysis. 3. Data Preparation After conducting the survey and receiving 200 valid completed questionnaires, HUES Agency had to code and input the data into SPSS. Variables were then defined after coding the questionnaire and the values were set based on the responses. After following this process, the data was cleaned to make sure there were no invalid responses and strategies were developed for data analysis. . 1. Data Analysis After the data was ready, HUES Agency used frequency distribution tables, cross tabulations, correlation and ANOVA tables to interpret the data. Additionally, the results and findings were then visually displayed in the form of pie charts, bar graphs and figures in order to derive appropriate recommendations for Blackberry. IV. RESULTS & FINDINGS 1. Qualitative Research Findings 1.1 Focus Group The two focus groups were conducted by HUES Agency. The differences between them and the overall findings are summarized below: Mostly participants in the first focus group looked at the features of a cell phone and made up their mind after scrutinizing all the features available to them by a particular brand of company. The second group however relied on brand loyalty. To them the name of the company was of more importance rather than the features and services provided by them. Most participants said that their favorite cell phone brand was mainly iPhone then Samsung followed by HTC and Blackberry. Most participants preferred to purchase their smartphones from local retail stores as it was more convenient and according to them the local retailers provided them with honest information. Participants from both the group were found to use a cell phone for texting and browsing on the internet. Very few said that they used it to make calls. Nearly all of them were aware of Blackberry and the first thing that came to their mind after hearing the brand’s name was a cell phone. Most of them had even purchased a BB smart phone. They seemed pretty satisfied as in no one complained of it. People in focus group found the customer service quite satisfactory except for one person who said who was put on whole for a long time. Their response suggested that they were helped out in some way or the other by the customer service department belonging to BB. There were different features that appealed people when buying a BB phone. Some bought it for BB messenger while some bought it because of its touch and Wifi. Both the groups were of the opinion that BB was in direct competition with iPhone and Samsung. They also believed that HTC is doing well in the UK and is catching up with the market leaders. Students were of the opinion that Blackberry has lost its dominance and will continue to do so mainly because of its lack of creativity. To them each BB set looked no different than the other one. They thought that iPhone and Samsung has much more to offer than BB. Advertising had a high impact on their decision to buy smartphones, TV commercials and internet advertising had the major impact. Most of the participants said that they would like to see celebrities in the advertisements someone like David Beckham who could really influence people to buy this kind of a product because of his charismatic personality. The second focus group stressed that they would like to see more inspiring business persons like Bill Gates and Donald Trump in the advertisements. Since most people were smartphone users, these types of phones were like a necessity for them rather than an optional purchase and they did not mind spending a little bit extra money for high quality branded smartphone products. Most participants bought a new smartphone every 1 year and switched to new models upon arrival. A smartphone features like the BB messenger were the important factors for them while selecting their phones. Majority of participants were influenced to buy additional items like a memory card with higher storage facility even though they went to the shop, knowing exactly what they wanted. Changing the name from Research in Motion to blackberry was a good decision according to the students. Most of them did not know about RIM and admitted they always thought that BB was not just a brand but a company itself. Students generally thought that BB is user friendly and easy to use. Though people did not know if BB did or did not cause pollution but they believed that it should make safe pollution free products for the consumers. Students were quite shocked when they heard of BB’s deal with Mercedes and that the company’s name would show up in the F1 car to be driven by Hamilton. They thought it was just the right kind of combination for BB to be associated with a prestigious company like Mercedes. 2. Quantitative Research Findings The quantitative analysis has also been performed in this report using the findings from the survey questionnaire. As it has been discussed that survey questionnaire was developed in such a way that different variables for investigation the relationship between them can be identified. This smart phone industry is continuously reshaping itself as newer technologies are being introduced and there is rigorous R&D taking place within companies. It has also been understood that all companies are competing against each other not only on the technology and applications offered to customers but also on the basis of their marketing and pricing strategies. For the current report, the relationship between various factors of marketing mix including price, product, promotion, and place and overall satisfaction of customers using Blackberry smart phones is evaluated using regression model. In addition, this section of the report provides background information pertaining to survey participants and descriptive of each variable. Moreover, customers overall satisfaction associated with the use of Blackberry phones is analysed on the basis of the views of males and females who took part in the survey. 2.1 Demographics The actual results are attached in Appendix (C) of this report. Out of 200 respondents, 128 were males and 72 were females. Majority of the respondents are young and under the age of 45 years. The distribution of respondents on the basis of profession remained almost equal as the current research aimed to cover diverse views of individuals from different market segments. The graphical representation of these results is also made in the Appendix (D) of this report. 2.2 Main Variable – Overall Satisfaction The descriptive provided in the table below indicate that overall respondents are somewhat satisfied with the use of Blackberry smart phones as the mean value is closer to 4. However, the standard deviation is more than 1 which is considered to be high and this suggests that there are significant variations in responses collected.   Mean Std. Deviation Overall customer satisfaction derived from Blackberry products and services? 3.55 1.235 2.3 Cross Tabulation of Gender and Overall Satisfaction The table below indicates that majority of males are somewhat satisfied with the use of Blackberry. While on the other hand, females are either somewhat or strongly satisfied with the use of Blackberry. Although, there is no previous data to compare this finding, but it appears that females are fond of these phones.     Overall Satisfaction Total     Strongly Disagree Somewhat Disagree Neither Agree nor Disagree Somewhat Agree Strongly Agree Male Count 12 17 16 58 25 128   % 9.4% 13.3% 12.5% 45.3% 19.5% 64% Female Count 7 9 10 27 19 72   % 9.7% 12.5% 13.9% 37.5% 26.4% 36% Total Count 19 26 26 85 44 200   % 9.5% 13.0% 13.0% 42.5% 22.0%   2.3 Marketing Mix There are four different variables identified on the basis of evaluation of the marketing mix of Blackberry including Product and features, Pricing Strategies, Promotional Endeavour, and Product’s Placement and Accessibility. The descriptive pertaining to these elements of a marketing mix is provided in the following table: Product and features Pricing Strategies   Mean Std. Deviation   Mean Std. Deviation You think Blackberry has the best operating system amongst Smart phones 2.36 1.169 You think BB cell phones are competitively priced 3.09 1.220 You think BB messenger is the best feature in BB phones 3.18 1.361 You think lowering the price will encourage people to buy BB 2.58 1.183 You think BB provides the best typing ordeal with QWERTY keys 2.35 1.352 You thing BB products are good value for money 3.16 1.313 You think batteries in BB last longer than other smart phones 3.17 1.338 You think BB’s Z10 is strong enough to compete in the market with iPhone 5 and Galaxy S4 2.67 1.296 From the above, it can be understood that there is no clear view regarding products of Blackberry in terms of their features. This may be the reason of the inability of Blackberry to introduce new and competitive models in responses to Apple and Samsung. Moreover, the new model Z10 has operational bugs and the company is still trying to overcome them for its buyers. Moreover, questions related to the pricing strategy indicate that the Blackberry phones are reasonably priced but reduction in price will not push the demand for these phones. This is due to the reason that the success of smart phones is determined by their operating systems, features, and app support. The standard deviation is on the higher side which implies that there is a high dispersion in responses on either side of the mean value. Promotional Endeavour Product’s Placement and Accessibility   Mean Std. Deviation   Mean Std. Deviation You think BB’s advertising strategies influence consumers buying behavior 3.55 1.177 You think BB products are easily accessible all over in the UK 3.32 1.328 You think BB should use celebrity endorsements 3.34 1.332 You think BB products can easily be bought online from the company’s website 3.42 1.253 You think the company should focus more towards direct selling in order to interact more frequently with customers 3.11 1.403 You think BB products are always in supply to consumer needs 2.73 1.425 Most of respondents have a view that Blackberry promotional activities including advertisement do have influence on the consumer behaviour. They also somewhat agree that the company must use celebrity endorsement to revive the brand and also focus on opening up Blackberry boutiques like Apple and other companies to attract customers and make more sales. The company is somewhat able to make its products accessible in different stores throughout the UK and it also provides an online system for customers to buy its phones. Similarly, there is a standard deviation in responses which suggests higher dispersion in responses collected from the mean value. Regression Analysis The regression analysis has been performed to predict how well the marketing mix including price, product, promotion, and place (independent variables) of Blackberry is currently placed which is positively contributing to the overall satisfaction of consumers using these phones (dependent variable). Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate 1 .204a .041 .022 1.2216 The above table indicates that R-squared is .204, which implies that the regression model is only able to predict 20.4% of the total variations observed in the dependent variable resulting from changes in the independent variables. The following ANOVA table also highlights that the relationship predicted between dependent and independent variables is not significant as p>0.05. ANOVAa Model Sum of Squares df Mean Square F Sig. 1 Regression 12.597 4 3.149 2.110 .081b Residual 290.998 195 1.492     Total 303.595 199       The following table indicates the coefficient of intercept β0 is 3.365. The coefficients of slope are β1: -.260, β2: .056, β3: .259, and β4: -.044. This implies the data collected from the survey indicates a negative impact of Blackberry products and features on overall satisfaction of consumers. However, this relationship is not significant as p>0.05. This suggests that the company needs to innovate and improve its smart phones technology which is causing it to lose its position in the market. The pricing strategy followed by Blackberry has a positive impact on consumer satisfaction, which is not significant. Moreover, the promotional activities carried out by the company have a significant positive impact on consumers’ satisfaction. The company’s placement of its products and accessibility of consumers also a negative relationship with consumer’s satisfaction, which implies that the company still needs to do a lot to ensure that its products are available throughout the UK. Coefficients Model   Unstandardized Coefficients   Standardized Coefficients t Sig.     B Std. Error Beta     1 (Constant) 3.365 .731   4.603 .000   Product and features -.260 .150 -.122 -1.731 .085   Pricing Strategies .056 .123 .032 .455 .650   Promotional Endeavour .259 .115 .159 2.264 .025   Product’s placement and accessibility -.044 .103 -.030 -.422 .674 a. Dependent Variable: Overall customer satisfaction derived from Blackberry products and services? The regression equation therefore obtained from the above table is provided as follows: Overall Customer Satisfaction: 3.365 -.260 x Products and Features + .056 x Pricing + .259 x Promotion -.044 x Placement V. Limitations Accurate, up-to-date information obtained by marketing research is crucial for the Blackberry. While conducting the research, HUES Agency faced certain limitations which have been explained below: Time constraints: Since this marketing research report was needed by Blackberry as soon as possible, HUES Agency had limited amount of time to conduct qualitative and quantitative research. It would have probably been more efficient than it already is if there was some more time provided. Reliability of the data: Since the time was limited, the quality of data collected was probably not as accurate as it could have been. The company tried to do its best to be as precise and accurate to obtain substantial data related to the market. Unexpected delays: Collecting responses to the survey took a lot more time than expected. Finding appropriate candidates for filling out the survey took a lot of time and it directly affected the process of analysis. VI. Conclusion and Recommendations By conducting this research study, HUES Agency aimed to provide Blackberry with valuable recommendations on how they can improve certain areas of operation in order to maintain and further improve its market position in the UK. After extensive qualitative and quantitative analysis it was found that majority of people found BB not competing too well in the market with the two most dominant smart phones brand that are Apple’s iPhone and Samsung’s Galaxy. Some ideas and recommendations have been developed that are discussed below. The research penetrated that Blackberry is losing market shares rapidly and that they are not in the same league with Apple and Samsung. It is more in competition with HTC and some people believe that over the next few years they will completely be forced out of the market. People believe that Blackberry needs to act quickly to remain in contention with other companies and in order to do so they have to be a little more inventive. People complained that they were tired to see the same kind of phone that looks more like a ‘box’. Mostly people preferred using touch screen smartphones and there is where BB loses its appeal. People admitted that BB touch screen phones are not all that great compared to its rivals. In order to do well in the market, BB will have to reinvent its products and go under a massive change. Their shape, design, size (including screen), color etc are not favored much by people who are switching to other companies. Almost everyone in both the focus groups suggested that BB should use endorsers to promote its products. People also came out with various names like David Beckham who has millions of fan following and might actually help to at least retain the current market positions. So it is established from the two focus groups that people want to see more of Blackberry in TV screens and billboards. People also expressed positive feelings when they heard about BB’s new deal with Mercedes. They were of the opinion that a deal of this nature could really help them build a prestigious image like that of Mercedes. However there are few positive things that the company is doing. The company changed its name from RIM, which people had not really heard about much, to Blackberry. People were of the opinion that the company would benefit from this move as people were well aware of Blackberry. List of References Arthur, C., 2011. The Guardian. [Online] Available at: http://www.guardian.co.uk/technology/2011/feb/18/symbian-uk-market-loser-forecast [Accessed 27 March 2013]. BBC, 2012. UN: Six billion mobile phone subscriptions in the world. [Online] Available at: http://www.bbc.co.uk/news/technology-19925506 [Accessed 23 March 2013]. Castells, M., 2007. Mobile Communication and Society: A Global Perspective. Ist ed. Massachusetts: The MIT Press. Dredge, S., 2013. The Guardian. [Online] Available at: http://www.guardian.co.uk/technology/appsblog/2013/mar/13/stop-children-spending-money-in-ipad-games [Accessed 23 March 2013]. European Scrutiny Committee, 2011. First report of session 2010-11. 1st ed. London: The Stationery office. Hartmann, M., 2008. After the Mobile Phone?: Social Changes and the Development of Mobile Communication. 1st ed. Berlin: Frank and Timme. Ling, R., 2004. The Mobile Connection: The Cell Phones Impact on Society. 1st ed. San Francisco: Morgan Kaufman Publishers. Sedghi, A., 2012. The Guardian. [Online] Available at: http://www.guardian.co.uk/news/datablog/2012/dec/13/uk-online-obsession-ofcom-latest-figures [Accessed 23 March 2013]. The Telegraph, 2012. Android extends lead over Apple iphone. [Online] Available at: http://www.telegraph.co.uk/technology/mobile-phones/9474430/Android-extends-lead-over-Apple-iPhone.html [Accessed 23 March 2013]. Wray, R., 2009. The Guardian. [Online] Available at: http://www.guardian.co.uk/business/2009/sep/08/uk-mobile-market-share [Accessed 27 March 2013]. VII. Appendix A. Research Proposal B. Focus Group Agenda C. Focus Group Transcript C.1 Focus Group transcript 1 C.2 Focus Group transcript 2 D. Pilot Questionnaire (before testing) E. Questionnaire (final) F. Questionnaire Findings G. SPSS data file Read More