ASSIGNMENT
Course : MBA (Finance)
Module : Markets& Marketing
Code : (MARK5052)
Student : John Fernandes
Identity No : P13191312
Submitted to : Dr. Anne Broderick
University : De Montfort University
Leicester – UK
Submitted on : 22.11.2013
Word Count - 1197
CONTENTS
1
BlackBerry - Case Study Page Nos
I Introduction 3
II Market Segmentation 3
2.1 Age 3
2.2 Lifestyle 3
III Market Targeting 4
3.1 Phone users 4
IV Market Positioning 4
4.1 Credibility 4
4.2 Clarity 4
4.3 Consistency 4
4.4 Competitiveness 5
V Conclusion 5
VI References 6
VII Appendices 7-8
2
BlackBerry - Case Study
I - Introduction
On examining the market segmentation, targeting and positioning patterns as introduced by
Jobber (2010, p. 259-256), the suggestions provided by him,can be appliedto the BlackBerry
case, on identifying the key variables of segmentation and the key factors of target marketing
and elements of positioning.
The segmentation of the smartphone market largely depends on the psychographic variable -
lifestyle and the profile variable – demographic (age).Mintel (2013a, p. 1) says that the
smartphone market segment prioritises the people who are below the age of 55 and the tech
savvy, white collared professionals.
The main focus of this case study revolves on consumers lifestyle in tandem with age, in respect
to segmentation. The factorsof segment growth rate and social trends, with respect to target
marketing and credibility, clarity, consistency and competitiveness with respect to positioning,
of Blackberry. It is evident that the market segment of smartphone due to its not so friendly
usage, mostly with the people over 55 years, has restricted its growth, as noted in Mintel (2013c
p6).
II – Market Segmentation
2.1 Age:is considered as one of the most important segmentation in profile variables. The over
55s age group,have been kept neglected. The present day smartphones that add-on new features
by the day, perplex operations. The data given in Fig.1&2 as reported by Mintel (2013)
substantiates that smartphone ownership is considerably lower amongst seniors i.e. 29%
compared to 73% of under-55s, representing the largest discrepancy of any device. The majority
i.e. 71% of over-55s compared to 38% of under-55s, own a basic mobile phone.Fig.3,presents
factorsthat prevent smartphone purchases, not easy to use being one of them, as reported by
Mintel (2013b, p 5).
2.2 Lifestyle:The second most important segmentation of the smartphone, depends on the
psychographic variable – lifestyle. In the early 2000s, BlackBerry (formerly RIM) was the
unsurpassed smartphone leader. Driven by an engineering culture, the company gained virtual
monopoly by targeting large corporations neglecting the phone users and by addressing security
requirements to protect data. However Apple romped in the market with customers showing
their interest to interact freely, in music, video, apps etc. Today only a handful of IT
professionals plan to support BlackBerry, as noted by (Sebastian, J. et al. 2013) thusignoring the
significance of security (privacy) to interact without care or restraint.
3
III - Market Targeting
3.1 Phone-users:In terms of market targeting, BlackBerry failed to target the phone users
amongst the professionals and the phone users themselves, who were targeted by Apple’s
iPhone, and Android,thus failing to understand the segment growth rate and social trend factors.
In 2009, Blackberry, launched the Vodafone “BlackBerry boys”, which were a hit, but success
was short lived. In the last quarter of 2012, as per CyberMedia Research reports, Apple shipped
280,000 devices in India against 210,000 by BlackBerry as detailed by analyst Sen and Rajan
(Mar 2013, p. 1) Thus BlackBerry has to target a wide range of customersand at the same time
provide varied features to the techno savvy purchasers.
IV – Market Positioning
4.1 Credibility:BlackBerry’s credibility in positioning itself in the market, seems to be
dwindling in the minds of its target customers. The short lived hit of the “BlackBerry boy’s” and
only a third of IT professionals backing,who probably seem to understand the value of security.
Smartphones are increasingly at risk from sophisticated IT security attacks as reported byKey
Note (July 2013, p. 23).
4.2 Clarity:In positioning its clarity, BlackBerry has failed to re-position itself, allowing
Apple’s iPhone and Android to capitulate on its market share. In October 2012, Microsoft
launchedWindows Phone 8 (Smartphone’s) indicating the markets potential. BlackBerry has the
advantage,as 80 million people use their information-technology,departments trust them as
secure, Operators are keen that the duo should be challenged, Economist (Mar 2013, p. 2).. They
should bank on these advantages,. The latest Kantar World panel Comtech figures of April 2013,
show BlackBerry has 5.6% of the UK market for smartphone sales compared to 13.8% a year
ago, as noted by Balakrishnan (Feb 2013, p. 1). BlackBerry’s prospective buyers, fell from 38%
in December 2009, to 16% in March, 2013.Adding to its woes, only 35% of the BlackBerry
owners expect to stay with themin choosing their next phone, with 24% likely to opt for Apple
and 9% eyeing towards Samsung, as viewed by analyst Tesseras (Jun 2013, p. 1).
4.3 Consistency: BlackBerry took a beating in failing to consistently position themselves, for
delaying a tangible re-positioning, of their products,while the target market is
expanding/shiftingto satisfy the changing customer needs and taste.Compared to Samsung
Electronics, which was once manufacturingcheap televisions and microwaves, is now a premium
priced flat-screen television and mobile hand set brand, focussing on ‘techno savvy’customers
who are willing to pay a high price as expressed by Jobber (2010, p. 316) similarly as
Apple.BlackBerry failedto identify the freedom to express as an opportunity waiting in the threat
towards security, which was recognised and capitulated by Apple and Samsung.
4
4.4 Competitiveness: Having lost its competitiveness, a few traces of BlackBerry’s
repositioning towards competitiveness, could be seen in the launch of Vodafone “BlackBerry
boys”. The market share firm IDC Corporate USA, has reported that BlackBerry’s market share
took a nose dive from 20% in 2009 to 4.8% in 2012. Its market share in the US was a meagre
1.6% and it no longer figures amongst the top five smartphone vendor’s in the world. IDC has
further predicted that despite their launch of technologically sound phone, BlackBerry’s global
market share could drop to 4.1% in 2016. IDC’s Kevin Restivo (senior research analyst) opines
“All phones look the same and act the same. So it is less about the quality of the device and
more about the ecosystem” i.e. keeping the users interactive. Gartner India’s, Anshul Gupta
(principal research analyst) says, BlackBerry lost its market share as its operating system were
not optimised for touch screens, which had become the normas shared by (Pulakkat 2013, p. 1-
2). BlackBerry has shown glimpses towards competitiveness and need to come out with
something different to regain its lost ground.
V - Conclusion
BlackBerry’s delay in not providing technology to the phone users toexpress freely,have cost
them dearly. However with $ 2.9 billion in cash (Pulakkat 2013 p. 1-2).,it has a fighting chance,
being a well accepted brand in India, with more than 700 million phone users out of which only
87 million use smartphones,(Balakrishnan 2013, p. 2).The untapped and neglected market of the
over 55s all over and its revival plan to introduce devices that would be used
fromcommunication to computing, seems bright. The devices could replace a computer to do
business, command the car, control our health or even used for entertainment. Their new
developed operating system has already seeped into cars, industrial control systems, medical
equipment, nuclear plants etc. says (Pulakkat 2013, p. 2-3 ). Thus BlackBerry, through its
revival plan, communicating to computing, and with $ 2.9 billion in cash, makes it crystal clear,
that the company intends to do away with the computer to regain its market share and challenge
the dominance of Apple and Samsung.
5
VI - References
BALAKRISHNAN, R. (2013), BlackBerry 10 arrives with a bang; can it grab the No 3 slot in
each market it's launched in? Brand Equity: New Delhi, pp. 1-2, available from ProQuest,
accessed 13 October 2013
Economist Intelligence Unit (2013) Bright-eyed and bushy-tailed; Smartphone operating
systems, The Economist 406.8825 (Mar 2, 2013): 62: London, available from ProQuest,
accessed 13 October 2013
JOBBER, D.(2010)Market segmentation and positioning. In:Principles and practice of
marketing, 6th ed. Maidenhead: McGraw-Hill, pp.259-296.
JOBBER, D.(2010)Managing products: brand and corporate identity management. In:Principles
and practice of marketing, 6th ed. Maidenhead: McGraw-Hill, pp.316.
KEY NOTE (2013) Strengths, weaknesses, opportunities and threats: In: Market report 2013,
Mobile phones, 9 th ed. July 2013, pp. 23, Key Note Ltd, available from Key Note, accessed 15
October 2013
MINTEL (2013a) Technology and the Over-55s:Issues in the market-UK-January 2013Mintel
Oxygen, available from Mintel, accessed 29 October 2013
MINTEL (2013b)Mobile Phones-UK-February 2013, Mintel Oxygen, available from Mintel,
accessed 29 October 2013
MINTEL (2013c) Technology and the Over-55s: Mobile phone ownership-UK-January 2013,
Mintel Oxygen, available from Mintel, accessed 29 October 2013
PULAKKAT, H. (2013), BlackBerry goes from communicator to computer; will the strategy
work? Hardware: NewDelhi, pp. 1, available from ProQuest, accessed 13 October 2013
SEBASTIAN, J. et al. (2013) Blackberry insists BB10 activity will pay despite sales fall,
Centaur Communications Ltd:London, pp. 1, available from ProQuest, accessed 13 October
2013
SEN, S. & RAJAN, N. (2013) Desperate for a lift, New Delhi: Living Media India Limited, pp.
1, available from ProQuest, accessed 13 October 2013
TESSERAS, L. 2013, BlackBerry: Hoping to bear fruit, Centaur Communications Ltd, London,
pp. 1, available from ProQuest, accessed 13 October 2013
VII –APPENDICES
Fig. 1 - Smartphone Penetration
6
Smartphone ownership, by age, September 2012
90
79 78
80 73
70
60
52
50
42
%
40 35
30 27
20
10
0
16-24 25-34 35-44 45-54 55-64 55+ 65+
Source: GMI/Mintel, 2,000 internet users aged 16+, Sep 2012, atslide 3, power point of Mintel
Report, Mobile Phones UK (Feb 2013)
Fig. 2 - Mobile phones
Personal ownership of mobile phones, by age, October 2012
62%
Smartphone 73%
29%
46%
Basic mobile phone 38%
71%
0% 20% 40% 60% 80%
All Under-55s Over-55s
Source: GMI/Mintel, 2,000 internet users aged 16+, Oct 2012, in Executive Summary of Mintel
Report, page 4, Technology and the Over 55s UK (Jan 2013)
Fig. 3 -The Consumer – Factors That Prevented Smartphone Purchases
7
Reasons that have prevented consumers buying smartphones, November 2012
“What are the main reasons that have stopped you from buying a smartphone so
far? Please select all that apply.”
%
0 5 10 15 20 25 30 35 40 45
I don’t feel upgrading from a regular phone is
43
necessary
The handsets are too expensive 41
The contracts cost too much 36
I think basic mobile phones are easier to use 35
I don’t understand them 18
I dislike touchscreens 16
I think that smartphones are more of a
7
privacy risk than regular phones
I have not seen a phone model I like 4
I have used a smartphone before and didn’t
3
like it
I already have a smartphone for my work -
None of these 8
Source: GMI/Mintel, 680 internet users aged 16+ who own a basic mobile phone but not a
smartphone, Nov 2012, in Executive Summary of Mintel Report, page 5, Mobile Phones UK
(Feb 2013)
