Analysis of Integrated Marketing Communications Strategies: Blackberry - Report Example

Analysis of integrated marketing communications strategies: BLACKBERRY BY YOU YOUR SCHOOL INFO HERE HERE TABLE OF CONTENTS EXECUTIVE SUMMARY Introduction 2. Literature review 3. Market environment review 4. Critical analysis and discussion 5. Conclusion and recommendations REFERENCES EXECUTIVE SUMMARY Blackberry is currently a market trailer in the UK, losing market share against Apple and Samsung which hold the majority of smartphone users in the UK. Blackberry, once an innovator and pioneer in the smartphone industry, no longer sustains this reputation as a creative market leader which erodes the ability of the company to achieve greater sales revenues and consumer loyalty. Blackberry is still utilising its quality and innovation-based positioning strategies in its integrated marketing communications even though the firm trails as a modern pioneer and has reputational problems which assert that Blackberry may well be outdated and irrelevant today. Nokia, in the current UK market, utilises a similar strategy and has also failed to achieve significant market power in an environment where even the CEO of Nokia stated the firm has failed to properly innovate to keep up with competitors. Based on all research findings and analyses, it is recommended in this report that Blackberry repositions the Blackberry brand according to the end user (rather than quality), utilising IMC strategies that emphasise concepts of fun, excitement and exuberance. These characteristics and needs were identified as encompassing the most viable and profitable target market, the 25-34 year old consumer demographic. The creation of a brand personality based on ideology of fun is recommended as a critical dynamic to better personify the brand and better engage and motivate consumers to make purchases of Blackberry products. 1. Introduction Blackberry maintains considerable competition in the UK smartphone market, including Apple, Sony, Samsung and Nokia. Blackberry had been the first manufacturer of the modern smartphone concept which brought the company considerable revenue and reputational advantages as a pioneer. However, in today’s technological environment, it is becoming more simplistic for competitors to attempt replication of a competitor’s products, which has become apparent with the widespread success of the Apple iPhone, the Samsung Galaxy line, and many other smartphone brands distributed today in the United Kingdom. In this saturated competitive environment where the features and benefits of a smartphone product can be imitated, the only legitimate asset a firm has is its brand (Nandan 2005). Hence, the quality, focus and content of a smartphone brand’s integrated marketing communications (IMC) are critical to gaining market share and building a loyal customer base. This report evaluates the viability and potential profitability of Blackberry’s IMC activities to determine whether Blackberry is properly positioning itself in the UK market and establishing a lucrative brand identity. The report consults with relevant marketing theory and literature addressing consumer behaviour to make astute determinations regarding how Blackberry should approach its integrated marketing communications strategies in the future to ensure a better competitive position in the saturated UK market. As many smartphone marketers do not publish their specific marketing strategies in an effort to maintain corporate confidentiality, this report relies primarily on promotional imagery between competitors and the known socio-psychological characteristics of the smartphone consumer to assist in providing judicious recommendations for improvement. 2. Literature review IMC consists of marketing activities whereby the marketer attempts to promote a consistent message to desired consumer audiences through a variety of different marketing mediums. Effective IMC allows a firm to achieve its marketing objectives through a synchronised utilisation of different promotional strategies which, through consistency, effectively reinforce one another (Kitchen, Brignell and Tao 2004). It is the consistency of the messages being delivered via multiple promotional strategies that is absolutely critical to supporting the brand image (Duncan and Moriarty 1997). Blackberry has stayed true to its roots as a once-pioneering smartphone brand which serves as the brand’s positioning strategy in terms of quality and innovation. However, a 2013 study identified that consumers are starting to believe that Blackberry is becoming an outdated brand (Paul 2013). An analyst at Gartner, a premier technology research and consulting company, offered the following in regards to Blackberry’s current brand reputation: “They have suffered a fate a lot of big guys suffer from...they created the smartphone as we know it. They just didn’t see what was coming next. People can choose what device they want for work these days, and they don’t want Blackberry. Brand is important, cool factor is important, and Blackberry lost out on that” (Rushe 2013, p.2). Whilst substantially a harsh criticism of Blackberry, it does not appear that the brand maintains a positive consumer reputation in terms of coolness and the brand maintains an ineffective brand personality. Brand personality is applying human characteristics to the product or brand, hence personifying the brand with likable or desirable attributes (Aaker 1997). In contemporary marketing, establishing a brand personality is central to effectively positioning a brand and creating likability for it (Keller and Richey 2006). Blackberry currently utilises the following quality-oriented content in its IMC activities which are associated with long-standing positioning efforts to make the company stand out as an innovator, illustrated in Figure 1. Figure 1: Blackberry quality and innovation promotional message strategy Source: Disgustingness. (2014). Riot don’t buy it. [online] Available at: http://disgustingness.wordpress.com/tag/blackberry/ (accessed 8 November 2014). Source: Thump. (2012). Blackberry action ad starts here [online] Available at: http://www.thump.in/outdoor-ad-review/blackberry-action-starts-here-ad (accessed 8 November 2014). Blackberry consistently reinforces, as illustrated in Figure 1, boldness of its products and attempting to promote the Blackberry brand as being an enactor of action, still emphasising the brand as being an audacious innovator and pioneer. With consumer sentiment that the brand has reached its decline stage as a market innovator, this approach is obsolete as a means of effectively positioning the brand. Whilst consistency is evident in Blackberry IMC strategies, the message is rather archaic and does not establish a personality that relates emotionally or socio-psychologically with desired target consumers. Consumers maintain more positive opinion toward a brand when aspects of the brand converge and are congruent with consumer self-concept (Greenwald, et al. 2002). Hence, there is evidence that quality positioning as part of brand management strategy and promoting these messages would be ineffective for Blackberry in consumer markets where buyers no longer hold this view of the brand as a pioneer. Rogers (2003) supports this assertion, offering that consumers will not adopt a brand if it is not perceived as being compatible with their existing values. 3. Market environment review In the United Kingdom, there were 30.9 million smartphone users in 2013 (Statista 2013). Of these users, the most likely to own a smartphone are between 25 and 30 years of age (Styles 2013), representing the most lucrative target market (Styles). Consumers between 16 and 24 years old follow the aforementioned segment in smartphone ownership. A study conducted by Executive Digest (2008) explored how best to market to the 25-34 year old market segment. The study found that 80 percent of respondents believe this is the age where having fun should be a priority. Additionally, the study found that this demographic seek brands and experiences as a means of affirming their social identity (p.1). Furthermore, in the UK, 76 percent of smartphone users use their phones to access social media networks online (Google 2011). Why are these statistics important? Research suggests that consumers’ self-concept and personal well-being is improved when their relative social standing in society is perceived as positive (Suls, Martin and Wheeler 2002). Hence, there appears to be a connection between the smartphone being an outlet for improving social standing which, in turn, could theoretically improve one’s self-concept. Zhang and Chan (2009) iterate that when a brand provides consumers with a perception of self-expansion, they are more likely to become attached to the brand. From a financial perspective, the two leading competitors to Blackberry in the UK are Apple and Samsung who hold 75 percent of all smartphone market share in the country (TechSci Research 2012). By the year 2017, it is estimated that the smartphone market in the UK will be valued at USD $4.3 billion with a growth rate of 23 percent (TechSci Research). Offers Research Director at TechSci Research, a global market research organisation, “delivering what consumers want will turn out to be in a company’s good turn” (TechSci Research, p.1). As of 2011, Apple maintained nine percent market share in the UK, Samsung with 19 percent, and Blackberry at 10 percent, and Sony at eight percent (WordPress 2011). Blackberry’s largest demographic utilising its brand is between 18 and 24. The iPhone and Samsung have managed to capture the attention of the largest demographic, the 25-30 year-old consumer markets. The iPhone by Apple has managed to increase its market share from nine percent in 2011 to 27 percent in 2012 (WordPress 2012). Android phones, such as the Samsung Galaxy, were the most popular smartphones in the UK in 2012. Blackberry continues to lose market share in the United Kingdom. 4. Critical analysis and discussion It was established that the most desirable consumer segment, between 25 and 30 who are the most prominent smartphone users, desires to have fun and want to have relationships with brands that can affirm their social identities (Executive Digest 2008). Perhaps this is why Samsung is so effective in utilising consistent integrated marketing communications with a focus on consumer lifestyle. Figure 2 illustrates the messages directed toward the firm’s target demographic, the 25 to 30 market. Figure 2: Samsung lifestyle advertising 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 November 2014). Source: Euro Droid. (2011). Samsung Galaxy Apollo coming to Orange UK. [online] Available at: http://eurodroid.com/2010/06/14/samsung-galaxy-apollo-coming-to-orange-uk/ (accessed 7 November 2014). As illustrated by Figure 2, Samsung promotes a world of fun and infinite possibilities, hence linking the brand’s capability of enhancing consumer lifestyle as it would be perceived relevant to this target demographic. Samsung has managed to personify its smartphone brands with a fundamental emphasis on fun and excitement, which are recognised by Aaker (1997) as being a dimension for an effective brand personality. Coupled with the 25-30 year old segment maintaining values related to personal recreation, fun and social identity, Samsung likely improves its market share by gaining important emotional connections with consumers. Samsung sends the consistent message in its promotional advertisements that the brand can enhance consumer self-expansion and self-improvement, identified by Zhang and Chan (2009) as being a method of gaining important brand attachments. For the Apple iPhone, this brand’s approach to reaching the desirable 25 to 30 year old segment is somewhat similar to Samsung. Scott Goodson of Forbes Magazine (2011, p.1) evaluated what made Apple so successful in gaining consumer loyalty and determined this success is measured in terms of “ceasing telling consumers about what the company makes and, instead, promote what the brand believes in”. Figure 3 illustrates this approach. Figure 3: Apple iPhone IMC Source: Palmer, D. (2013). UK iPhone 5S sales three times that of iPhone 5C – but both fall well short of android, Computing. [online] Available at: http://www.computing.co.uk/ctg/news/2316443/uk-iphone-5s-sales-three-times-that-of-iphone-5c-but-both-fall-well-short-of-android Source: Guru Prasad. (2013). What does S stand for in iPhone 3GS, 4S and 5S? [online] Available at: http://guruprasad.net/posts/what-does-s-stand-for-in-iphone-3gs-4s-5s/ (accessed 7 November 2014). The study conducted by Executive Digest (2008) also found that the 25-34 year-old market segment, the most viable for smartphone marketers, desires to fully explore life. Apple’s consistent messages about improvement would appear to be aligned with the 25-34 year-old demographic that maintains the highest group usership of iPhone products. Forward thinking and this changes everything establishes what the firm believes in and attempts to align this sophisticated, change-focused personality with what drives target market motivations. Robinson (2012, p.1) asserts that Apple gains target segment loyalty by building a brand personality that is about innovation and “liberty regained” with a power-to-the-people ideology. This may explain how Apple’s IMC strategies provide consumers with a sense of personal self-expansion, identified by Zhang and Chan (2009) as being relevant for loyalty to the brand. Through Apple technology, the brand’s main concept of a better life - explored through Apple technology encompasses the message being delivered to the 25-34 year old consumer markets, hence linking it to their core values. Nokia, a small market share holder in the UK, utilises a similar positioning strategy to that of Blackberry in its IMC activities in an effort to attract target market attention. Figure 4 illustrates Nokia’s quality-based positioning. Figure 4: Nokia quality positioning in IMC Source: Waugh, R. (2012). Nokia forced to cut price of flagship new smartphone by 50% after disastrous sales – as shared plunge to new 15-year low, Daily Mail. [online] Available at: http://www.dailymail.co.uk/sciencetech/article-2174231/Nokia-forced-cut-price-flagship-new-smartphone-50-disastrous-sales--phone-giant-cuts-jobs-shares-plunge.html (accessed 8 November 2014). Source: Tech It In. (2011). New Nokia N8 UK TV advert. [online] Available at: http://www.techit.in/2010/10/new-nokia-n8-uk-tv-advert/ (accessed 7 November 2014). Nokia attempts to elicit an excitement-based response to the brand without emphasising customer lifestyles, motivations or general characteristics. Instead, Nokia asserts that its product brands are larger than life and that the consumer should take notice. Nokia utilises IMC insinuating that its brands are grandiose and that simply being present or available should spark an instant demand based on an implied level of quality and benefit. Even the CEO of Nokia, Stephen Elop, stated that Nokia had failed to keep up with competitive market innovations and therefore the company lacks competitive capability (Blandford 2011). Hence, though a rather subjective assertion, consumers might not be attracted to the rather self-important brand personality being promoted by Nokia as they have previous experiences with lack of innovation when using Nokia smartphone products and, therefore, might not be buying the message. This is similar to Blackberry attempting to illustrate quality positioning through its IMC messages when, in reality, consumers no longer believe in the messages’ relevancy or significance. Ostentatious billboard advertisements, therefore, might be less effective than Nokia realises. 5. Conclusion and recommendations The market leaders in the UK, Apple and Samsung, utilise print advertising messages to reinforce a brand personality that focuses on the lifestyles and motivations of the most desirable target market, the 25 to 34 year-old demographics. With Apple, the company draws on forward-thinking and improvement-based message ideologies which is relevant for how the target audience views the exploration of life. When coupled with the insinuation that Apple products can improve the self through its smartphone technologies, it seems to capture more loyalty and, hence, improved market share. Samsung, with its focus on fun and excitement, relevant to the behaviours of the 25-34 markets, also becomes a strong market player in the United Kingdom. As a result, it is recommended that Blackberry reposition the company from its quality and innovation focus which does not appear to be relevant and engaging to the UK consumer. Perceptions that Blackberry is an outdated technology brand name speaks to the market sentiment about how the brand is viewed. To continue with IMC in print advertisements that continue to emphasise these traits is likely a contributing cause for diminishing market share in the UK. This repositioning should incorporate a more intriguing and exuberant personality which is so critical in gaining consumer interest in the brand and loyalty. Blackberry should utilise messages in its IMC that are aligned with known consumer attributes and motivations in an effort to personify the Blackberry brand. Utilising fun and exciting imagery illustrating actors fitting the 25-34 year-old demographic profile with messages such as Blackberry: Let the fun begin or other relevant, consistent messages as part of the IMC campaign might alter some of the pre-existing, negative opinion about Blackberry and better engage the target audience with a propensity to seek amusement. Coupled with the knowledge that when a brand gives consumers the perception that it can improve their self-expansion, Blackberry can create a quality brand personality which asserts Blackberry is capable of delivering such fun experiences and activities. With Nokia using similar positioning tactics to Blackberry and not achieving market share, this provides considerable support that this tactic is not likely going to improve the competitive position of either firm, especially when legitimate innovative benefits and features are lacking (or perceived as lacking) in the tangible product. Blackberry, therefore, should reposition in terms of the end user, using its exuberant new personality to achieve the necessary emotional connections from the consumer required to be a market leader in this very saturated UK smartphone market. The UK market is a viable market for growth with an expected growth rate of 23 percent by 2017. However, Apple and Samsung have strong consumer loyalties and considerable brand recognition in this market, which will require a holistic brand management strategy in order to effectively (and rapidly) reposition the business. Once the new brand personality is developed to reflect merriment and exuberance, Blackberry must underpin all of its consistent IMC strategies to reliably reinforce that the brand is capable of enhancing target market lifestyles. With the notion that personal well-being of consumers is enhanced when it is perceived that they maintain a positive social standing, Blackberry can also play on these characteristics and needs of the target market to improve the impact of its personality and messages. 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