Research in Motion – How Branding Can Save BlackBerry

As you may have heard Research in Motion (RIM) is not having the best of times, to say the least.  The firm made a loss of $125m for the first 3 months of 2012 and had a decline in net profit for the full financial year of $2.2bn.  Moreover, this comes amongst major organisational change, with co-chief executives Mike Lazaridis and Jim Balsille only having resigned in January of this year.  Clearly,the new CEO, Thorsten Heins, has to make some serious strategic and marketing decisions.

The first of these decisions has been to focus less on the consumer market and focus more on their core – or orignal customers – of business executives.  It is important to note that RIM is not abandoning consumers, as many report, and there is plenty of opportunity to turn the business around.  The firm simply hopes this business-orientation will mean it will compete less directly with the likes of Apple, HTC and Samsung – to name a few.

Other business writers have already discussed whether or not this is a viable strategy.  Many have criticised it:

‘RIM chose a strategy based on how easy it would be to execute rather than how successful it would be’ – Macworld.

Others have said that the firm should focus on consumers, as that is where the revenue growth is.

But marketers have come out in favour of targeting business users.  According to the Elaboration Liklihood Model, for a high-involvement product like a mobile phone, it is the ‘Steak’ or the ‘Sausage’ (the core product) that persuades people – or businesses – to purchase a BlackBerry.  Whereas, the ‘Sizzle’ (branding and advertising), is less persuasive.  David Taylor, argues that BlackBerry phones have become all Sizzle and no Sausage.

The general consensus that BlackBerry phones, the core of the product,  are the problem has led to many business writers primarily focusing on the features and innovations that future phones need (see Sydney Morning Herald and Mobile Opportunity). But I think the critical issue is branding.

So to clarify there are the following combination (depending on market and whether to focus on the Sausage or Sizzle) of strategic options:

Blackberry’s current position is strategy 3 (see below), and has announced a return to strategy 2.  Which will hopefully allow it to use a combination of 2 and 4 in the future: keep its products up-to-date and add profitable value through marketing.

However, I think the strategy Blackberry needs is initially strategy 1, and then move to have a combination of strategy 1 and 4 once it has revitalised its product range.

Hence their strategy should be in three stages:

1) Look to consumers’ needs to develop new product features = improving the Sausage;

2) Use branding to target business users with these new product features = improving the Sizzle.

3) Ultimately, these two improvements will allow RIM to use Laswell’s (1948) triple appeal to encourage business customer’s egos to choose BlackBerry (this will be returned to later).

(There should be no debate about targeting consumers vs business users or having Sausage vs Sizzle – they need to be good at all four to compete in a saturated market.)

1) Improving the Sausage:
Now, this might seem contradictory to target business users by focusing on the needs of consumers.  But an underlying assumption that others seem to have made is the belief that consumers and businesses have different needs.  I strongly believe in order to be able to appeal to business users, the firm must firstly target consumers.

Part of BlackBerry’s problems is that they have attracted lots of teenage consumers (see graph, from Ofcom, below) who use the phone’s keyboard to send text messages – or use BlackBerry messenger – easily and quickly.  But this was once a feature that appealed to business users for sending emails.

At the same time the iPhone has become more popular among business users than BlackBerries:

So it would seem that BlackBerry have become popular among teenagers by making a phone designed for business use; and that Apple have become popular among business users by making a phone designed for consumers.  Therefore, both market segments must have converging needs.

Hence – and please hear me out – the features that BlackBerry needs to implement  are consumer-orientated even if it means loosing short-term brand identity with business customers.

This, like I said, is because consumers and business users actually have similar needs (after all, executives are only human!)

I would suggest the following changes to be made:

1) Introduce touchscreens for all phones – better for users playing games and watching videos;

2) Move to Android or Windows Mobile operating systems – allows more apps to be downloaded;

3) Ditch the keyboard – makes the device more portable/allows larger screen depending on the phone design.

Obviously, these would only allow BlackBerry to maintain market share in the consumer market, as these features are nothing new/innovative, but that would still be sufficient to improve their products for business customers.

The next part of my proposed strategy is taking the new Sausage and giving it a business-orientated Sizzle.

2) Improving the Sizzle:

Unfortunately for BlackBerry, as mobile phones are public necessities, the choice of brand is highly influenced by reference groups.

Therefore the trend of teenagers adopting the phone looks set to continue:  as teenagers seek self-verification goals within social groups, if they own a BlackBerry they believe they will popular;  as business users seek self-enhancement goals, they can improve their esteem if they own an iPhone.

According to Heider’s (1958) balance theory, teenage users of BlackBerry phones has changed  consumers attitudes towards BlackBerry

Original attitudes towards BlackBerry:

There used to be a strong positive connection between business users and BlackBerry and, as a public necessity, this was highly evident to potential consumers who could associate business men with the BlackBerry brand.

Thus anyone who believes that their actual sense of self is a business person, or their ideal self-concept is to be a business person, they would purchase a BlackBerry as it would be seen as appropriate group behaviour to be a business person, whom they have favourable attitudes towards.

Current attitudes towards BlackBerry:

Now, however, there is a strong positive connection between teenagers and BlackBerry.  Consequently, those who like BlackBerry for business reasons must also view teenagers positively or in the same light as BlackBerry.  Thus, if they saw teenagers unfavourably there is a good chance they now also see BlackBerry negatively.

So, in order to improve the brand or the Sizzle, BlackBerry need to get business users to start using their revitalised phones again and also act as opinion leaders.  They can replace teenagers with business people, as personifiers of the brand, by using any or all of these strategies:

1)  Use opinion leaders as the target market segment – approach select businesses directly and offer to supply their firm with company phones for free.  Using high-profile firms with a corporate reputation, such as IBM, would help re-condition consumers to associate BlackBerry and business people.  Ideally, BlackBerry needs to pair being a successful business person/company with using their phones.

2) Create opinion leaders – offer a referral scheme for work colleagues in professional jobs.  For instance, a BlackBerry customer, who uses the phone for personal use and work, can ‘introduce’ a colleague and they are both rewarded with BlackBerry Playbook tablets.

3) Use opinion leaders in marketing communications – RIM need to use advertisements that feature opinion leaders, whether or not it is clearly scripted.  This has recently been used by rivals HTC to target a youthful segment:

In addition to using word-of-mouth communications, I recommend RIM taking an upward brand stretch to make the product more exclusive:

1) Bring out a new brand name – this new brand name should be used to categorise RIM’s phones that are designed for business users; the existing BlackBerry name/devices should be left to target emerging markets as low-tech and cheap smartphones.

2) Premium price – to reflect the overall positioning of the new line of RIM phones for business people, they need to become a status symbol and, in our Western society, this can be easily done with a premium price.

Thus, by now RIM should have improved their Sausage with features consumers want, and, dressed it up with Sizzle to give it a business brand image.  The third and final step is to combine these seemingly polar strategies into a triple appeal.

3) Creating a triple appeal

According to Freud our personality consists of an Id, which seeks immediate pleasure (naughty side), a Superego that seeks to conform to societal expectations (nice side) and an Ego that balances the two.

In order to create a triple appeal RIM must appeal to the Id, Superego and Ego; this will have been done by giving their phones consumer features with a business brand image.

The appeals to the Id include: ability to download apps, play games, watch videos on a larger screen.  But conversely these can be viewed to also satisfy the Superego: download productivity apps to use on commutes and business trips, ability to play games is an indicator of hardware quality, larger screens makes emails easier to read.

Ultimately, these are easy to balance by the Ego through positioning the new phones as ‘naughty but nice’.  This is very important because there are two situations that RIM should sell their new range of business smartphones

1) Allow them to go on sale through consumer retail outlets to target business customers who want to use the phone at work and for personal uses.

2) Selling directly to firms.  Here the triple appeal is still important even in B2B markets.  Namely, although the deciders and purchasers within the firm will want the order for the Superego benefits, they will be heavily influence by others in the firm who subconsciously want the phone for its more fun/consumer benefits.

Further to this, the triple appeal strategy needs to be communicated explicitly to consumers, as well as being ‘baked-in’ to the product.  This means featuring the triple appeal in advertising, as successfully done by Aero chocolate and Maltesers (it is chocolate, but a ‘lighter’ option).

Thanks for reading a second in-depth post in a row!  To summarise: I think RIM need to make the phones better consumer experiences, use reference groups to target business users and combine everything to create a triple appeal.

What do you think they should do?  Leave your comments below.

© Josh Blatchford, author Manifested Marketing, 06/04/2012

P.S Happy Easter 🙂

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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