HTC – Brand Repositioning

HTC is the world’s third largest mobile phone manufacturer – with Apple in first place and Samsung in second place – according to market share.  Samsung better watch-out, however; HTC have just announced a strategic partnership with ‘Beats by Dr. Dre‘, the premium priced headphone producer.  By doing what could be considered a typical ‘market challenger’ strategy, HTC aim to increase their smartphone market share by targeting the teenage market that is dominated by RIM, who produce the Blackberry.  Hence, a new product range of smartphones that feature Beats audio will be launched later this year.

Although the teenage market is lucrative is it really wise to aim to reposition the brand to appeal to the mass market without acceptance from ‘early adopters’?

HTC essentially hope to steal away teenage blackberry consumers.  However, these users are considered to be the ‘early majority’ in purchasing new technological products.  For instance,  Blackberry was initial targeted at business users – who made up the early adopters – by positioning the full qwerty keyboard phones as being easy to use for sending emails.  It was not until their products had gained acceptance by these early adopters that teenage girls saw the product would also confer benefits for them too.  Namely, the keyboard would be great for instant messaging and texting.

The problem with HTC’s strategy is that they plan to completely avoid appealing to early adopters with their new Beats smartphones.  They are hoping Beats’ own branding – high-quality and fashionable – is strong enough to convince the mass market teenage to immediately purchase the new phones.  I think this is highly optimistic.

The teenage market has already demonstrated that they will not be enticed by a new product easily.  Hence, what I believe HTC should do is to target the audiophile market, who want a stellar sound performance from their mobile phone.  Thus, theoretically, the smartphone would be initial purchased by a few consumers – the innovators and early adopters – then by teenagers – the early majority, who need to see the benefits of a product before making a purchase.  Moreover, by targeting audiophiles, chances are HTC could steal market share away from Apple as well as RIM; consumers who want a mobile phone and an MP3 player in one device would now have an alternative to the iPhone.

Overall, I like the idea of repositioning HTC’s product mix by introducing a new range of music-orientated mobile phones.  The trouble is they are targeting the wrong consumer.  This highlights an oft forgotten fact of marketing: you must successfully target your consumer before trying to position the product in a way that would convince them to make a purchase.  In this case, HTC need to market to early adopters.  Then, through word-of-mouth promotion, can HTC tap into the goldmine that is the mass market.

Do you currently use a Blackberry – if so why? Does HTC’s Beats range appeal to you?

© Joshua Blatchford, author of Manifested Marketing, 12/08/2011

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