Consumer Behaviour Analysis
Generally, buying a phone requires a high level of consumer involvement in the decision making process, as consumers already have some knowledge of the brands. Especially, smartphone users are very knowledgeable of the apps, features and the specification of the products. Therefore, the brand differences are high in the mind of consumers.
The functionality of the product is not the only factor consumers are concerned about, cell-phones, like fashion items, are purchased for their design and are used for different purposes (professional and personal). Another significant change in the market is that people in medium income level are spending a bigger portion of their discretionary income on electronic gadgets and smartphones.
In terms of frequency of the purchase and the cost, although the buyer often doesn't need to pay for the phone upfront, the long term contracts with the service provider (usually 2 year long contracts), make the purchase a long term investment. A study in 2011 revealed that Americans (Blackberry’s main market) change their cell-phones the most often, compare to other nationalities, with 21.7 months intervals. (Phone Arena, 2011) Therefore, although cell-phones are not purchased very frequently, there is a huge benefit in retaining customers (first time users) of the products.
As it was mentioned in the last report, Blackberry has two main target market, Consumer market and Business market. I would describe Blackberry’s consumer market as “favourable brand switchers”, who purchase a Blackberry but also purchase other brands (i.e. iPhone, Android) as well.
On the other hand, I would describe the business buyers as more brand loyal and less price sensitive. They purchase the product less frequently but in larger scale, therefore are very profitable. As it was mentioned in the last report, security and ease of use were the two most valuable attributes of the product in the eyes of business users. This market sees better security, a better typing experience and better battery life in Blackberry and these qualities appeal to them. (The Globe and Mail, 2013)
Past Communication Objectives
Business buyers and consumer market have different values, wants and needs. While enterprise users desire a reliable, secure, easy to use device with email functionality, the young consumer market are looking for a fashionable, funky device with cool apps. These differences between the two resulted in an inconsistency in Blackberry’s marketing communication objectives.
Through its ads and campaigns, in an attempt to communicate with both target segments, Blackberry sent two different messages across (or a combination of two), focusing on different attributes of the product that were appealing to each market. For example, the following ad (mainly for Blackberry accessories) aims at the already brand users to make a repeat purchase. It states “some customers will need more than just one”, attempting to create a positive attitude towards the brand with focus on the variety in colours and its stylishness.
Another example would be the ad below. The ad states “Be bold. Accept no substitutes. Power the passions you pursue with a smart phone that expresses your style and simplifies your life.”
Again, it is aiming at the current customers to increase the repeat purchase rate. It also encourages other brand switchers for trial by sending a comparative message (“Be bold”) and focusing on the stylishness and ease of use. In this ad, however, Blackberry makes a brief and indirect reference to the professionals by emphasizing the usefulness of the devise in pursuing their careers.
In the next ad, Blackberry almost only talks to the enterprise users with no reference to the stylishness of the product. It focuses on the connectivity and user-friendliness of the device with a list of its features. The ad reads: “Join the conversation. Get closer, get smarter. Accessible, slim, Easy-t-use.” The ad encourages trial.
In this ad, Blackberry makes an attempt to communicate with both of their target market by stating: “Now, fashion and function play nice.” with a list of features and functionality of the product. It looks as if they are targeting new category users as the ad has more content, is informative and is trying to expand the brand knowledge that the target customers have of Blackberry.
Overall, because of the complexity in its segmentation, Blackberry had too many behavioural and communication objectives which resulted in an inconsistency in their messages. While some ads create awareness and brand knowledge, most ads attempt to create a liking or preference. Some Blackberry ads attempted to emotionally engage the users/ex-users. For example, in a video ad for Blackberry Z10, which was a failed comeback attempt for Blackberry to target consumer market, the device was used to connect and facilitate the communication between two generations of older professional parents and their teenage (or twenty something year olds) kids representing Blackberry’s past and present users. [1]
Blackberry invested heavily in a Super Bowl ad to promote Z10 in 2013.[2] The next year, however, Blackberry’s revenue went down by 38%. (Wasserman, 2014) The ad was specifically targeting young people (20 to 30 year olds) and focused on personal uses of the phone (personal phone calls, personal uses of the phone’s camera, playing games, etc). This, I believe, was the main reason that resulted in the failure. They failed to target the business market, they rather targeted the consumer market. Robert Glen, BlackBerry's senior director of global brand marketing, admitted that:
“I think we tried to bite off too much. We tried to attack the full market, and a good military commander would say choose best area for competing, look for a beachhead” (Wasserman, 2014)
Also, Blackberry's ads target the Blackberry users or ex-users rather than new category users or favourable brand switchers which suggests that Blackberry is looking to retain its users or win back its previous consumers from competitors. According to Forbes, a survey revealed that during the first two months of 2013, 34% of BlackBerry owners who plan to purchase a new phone in the next six months say they will stay with BlackBerry rather than switch to another brand (compare to 17% for Apple). (Forbes, 2013)
With emergence of smart phones, Blackberry's main mission was to convince Smartphone users that their products are not only limited to PDAs and that they are capable of making a decent smartphone. Their “Best of both worlds” ads tried to attract the first time Blackberry smartphone users. However, low market share, Buzz score and purchase consideration in the smart phone market shows that the users were not exactly convinced. (Wasserman, 2014)
Current Communication Objectives:
Blackberry has been experiencing some new highs recently. Blackberry’s new phone (Passport) became a success and sold out in just six hours on BlackBerry’s website and within 10 hours on Amazon.com. John Chen (current CEO) has proudly announced that they are having inventory issues. (Business Report, 2014) Though I have been very skeptical about John Chen’s strategy to pursue the enterprise market and “return to the company’s core strength in enterprise and security”,with current information on the market response, it has proven to be a smart move.
According to Chen, the consumer market is not a space that they can afford to be in. On the other hand, the new phone that they launched was a success in the enterprise market. The passport-size smart phone is designed for business users who write e-mails, study spreadsheets and read documents on their phones. The physical keyboard on the phone made the typing experience a lot easier. BlackBerry is once again, but this time solely and more aggressively, focused on the 30 percent of the market “that sees their phones as a tool, not as an entertainment portal.” According to John Chen, Blackberry is not trying to be “sexy” anymore. (Business Report, 2014)
The followings are the ads for Blackberry’s latest smart phone, Passport. The ads focus on the capabilities of the phone, targeting professionals in healthcare and other industries. They aim at new users as well as brand switchers by sending a comparative message that Passport is easier and more efficient to use compare to competitors' products and focus on professional uses more than personal uses. They create a belief that the wide screen of the phone is a differentiating factor that makes the product superior to competitors’.
The new marketing communication objectives of Blackberry can be summarized as:
- Leaving the consumer market to focus on the business market.
- Focusing on what differentiates the product from competitors’ which is the productivity, ease of use and practicality of the device by design, this is aligned with business market’s needs and wants.
- Targeting new users as well as brand switchers.
- Creating a positive attitude towards the brand and increasing brand awareness and consumers knowledge of the brand, through informative advertisement.
Surveys show that Blackberry’s Buzz score and purchase consideration fell every time Apple introduced a new iPhone (Wisserman, 2014), therefore, it is suggested that Blackberry advertises more aggressively at the time of the launch of Apple’s products.
Rationale for their current objectives:
Blackberry, originally, served the business segment, but with recognizing the potential that the younger segment (< 25 years old) had, they expanded their marketing strategy to appeal to this segment too. However, they failed in keeping this segment interested for different reasons. Firstly, Apple took the consumer market by storm in 2007 by offering an iconic design and entertaining apps. Google Android phone also, took the second position in the market share in smartphones market. Blackberry made inadequate effort to secure a position in smartphones market and rather decided to rely on the PDA market which was appealing to the business users.
Over time, business users’ needs shifted from PDA to smartphone. As a result, Blackberry lost a major portion of their business market to competitors who were more successful in the smartphone market. In the meanwhile, Blackberry brand has a corporate stigma associated with it as it originally was very popular among business users for its security, connectivity, reliability and ease of use. The company, however, can benefit from this reputation and win back the business market, their most loyal users, by offering a smart phone which is specifically tailored to their needs. There is no other smart phone manufacturer that is specifically and only targeting the business market.
Blackberry’s major competitor is Apple in this segment. Therefore, by differentiating itself from Apple through offering product attributes that are valued more in the business market, Blackberry can win the game. This is what John Chen is trying to accomplish through launching Passport and advertising it smartly.
Blackberry’s new strategy in terms of communication objectives is right on point. Buying a smart phone is a relatively complex decision making process as individuals are very knowledgeable about the brands and their offerings. Therefore, Blackberry has to create a belief that their product is superior to competitors’ to get potential users to buy their product.
[1] https://www.youtube.com/watch?v=BLRXUARm3kA
[2] https://www.youtube.com/watch?v=dY1ecfWT3GQ
References:
Victor, H. 2011. Phone Arena. Retrieved from: http://www.phonearena.com/news/Americans-replace-their-cell-phones-every-2-years-Finns--every-six-a-study-claims_id20255Business Report, 2014. BlackBerry: Passport phone beats forecasts. Retrieved from: http://www.iol.co.za/business/companies/blackberry-passport-phone-beats-forecasts-1.1766994#.VExIRbDF9IF
Forbes. 2013. BlackBerry Gaining Back Ground on Ad Awareness while iPhone Purchase Intent Slips. Retrieved from: http://www.forbes.com/sites/brandindex/2013/03/13/blackberry-gaining-back-ground-on-ad-awareness-while-iphone-purchase-intent-slips/
The Globe and Mail, 2013. Retrieved from: http://www.theglobeandmail.com/globe-investor/investment-ideas/strategy-lab/growth-investing/observing-consumer-behaviour-can-be-key-to-savvy-stock-picking/article13704092/
Wasserman, Tod. 2014. Mashable. Retrieved from: http://mashable.com/2014/10/19/blackberrys-turnaround-plan/
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