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Possible Solutions to Htc’s Current Decline in Sales/market Share as a Result of Non-Effective Marketing and Advertising Schemes.

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Possible Solutions to HTC’s current decline in Sales/Market Share as a result of non-effective marketing and advertising schemes. (Word Count: 1,482)

29% of mobile phone owners often reach for their mobile phones first when they have a “spare moment”, with it rising to 50% amongst 16-24 year olds. Current mobile phone owners state that they aren’t fully decided on which mobile phone platform to use next with 36% already split between Apple iOS or the Android OS (according to Mintel’s report, Mobile Phones – UK, February 2012). These statistics show that market share amongst the Telecommunications and Mobile Phone industry is open for rapid change at any point.

This essay will analyse HTC’s current declining market share and sales and provide potential solutions for the mobile phone manufacturer to reverse this occurrence. Academic analyses will be used to provide a solution and also elaborate reasoning as to why it is suitable to the telecommunications company.

HTC is a Taiwanese mobile phone manufacture founded in 1997 by Cher Wang and HT Cho; the company initially built its reputation “as the behind-the-scenes designer and manufacturer of many of the most popular OEM-branded mobile devices on the market.” (HTC Corporation, 2012). The company launched its next innovation in 2000, releasing the world’s first touchscreen mobile device, HTC Touch, and in the 8 years following, developed and released its first branded product series, the A series. The company has now gone on to split its phones into 5 separate categories (All, Social, Entertainment, Fashion and Business).

HTC has seen itself experience a profit slide of 79% and in a recent article with the BBC (2012), Jason McKenzie, HTC’s president of global sales and marketing, in 2012 stated that:

Most of our research suggests about 70% of consumers are walking into the store already knowing what they want to buy... so we don't have the luxury in a significant percentage of times to be able to actually put the HTC One in the consumer's hands.”

Reiterating the previous point that the Mobile phone industry is a very dynamic and volatile one that is susceptible to change. McKenzie later on stating:

"We cannot market like a Samsung - or Apple - where you've just got brute force tactics, carpet bombing the airwaves with TV commercials,"

McKenzie highlights the point (also reinforced later on in the article by a BBC Telecommunications analyst) that the issue is marketing, with the BBC stating that “… what budget HTC did have was spent on the wrong message.”.

HTC are not differentiating or pushing their flagship model, the HTC One, enough among the market and its main competitors, Samsung’s Galaxy Series and Apple’s iPhone; in a SWOT analysis (Marketline, 2012) of the company displaying it’s loss of market share as an impeding factor with the company cancelling the launch of the HTC One in Brazil whilst also simultaneously exiting the smartphone market in Brazil which is “one of the fastest growing smartphone market in terms of volume …  on track to become the fourth largest smartphone market in the next four years”, with Marketline observing the resulting impact on the company’s brand image.

The current focus point of HTC’s marketing campaign is arguably the ‘Skydivers’ advertisement, which depicts a supposed consumer, ‘Nick’ skydiving out of a plane whilst using the HTC One X to hold a fashion shoot. The advertisement provides a creative and elaborate way of getting the consumer’s attention but fails to inform about the actual product. The advertisement contradicts HTC’s corporate image as a humble, user-focused, upfront brand, with the company stating that “every idea is inspired by you [the consumer]” (Innovation inspired by you, 2011) on their website suggesting a substantial level of user-friendliness.

With this contradiction, the brand is not aiding its target of increasing its brand awareness, which is a necessity for the company as it wagers on the market with a marketing budget that is six times smaller than that of competitors, Samsung and Apple.

Brand awareness is something HTC lacks in comparison to its competitors with Apple and Samsung holding a variety of other products in their arsenal to help keep them relevant in the modern day and age. Although, HTC is a brand that is gradually gaining recognition in the current market with a survey held by Marketing Week (July 2012) concluding that HTC was sixth on the list of spontaneously cool brands when questioning 8-14 year olds, beating out Samsung and Apple in the process. This is a target market that has potential in the long haul with research showing that children tend to stay loyal to certain brands they’ve had heavy exposure to and maintain this during childhood. Whilst, these statistics display positive news for HTC, the brand name still dimmers in comparison to its competitors in the bigger picture and what consumers consider as ‘big brands’ in the industry.

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Research sourced from Mintel (see Figure.1) displays consumer purchase considerations and relative influences, the graph displays two key attributes that have the ability to be controlled or changed by a marketer; being the brand name of the phone and the recommendations of the product by family/friends. If HTC were to increase the credibility, reputation and brand awareness of the brand image/name, it would be much more considered, and even more so if the brand were to be made a talking point between friends, family and peers.

The Play Theory (Stephenson, 1967) states that media serves audiences to primarily entertain and provide play-experiences. A play-experience being a social activity that leans more towards pleasure than work; Stephenson stated that various, if not, all cultures shared these experiences and the need to satisfy desires of entertainment though some form of talking point.  Stephenson refers to Hyman’s theory of a ‘daily mix’ which refers to repetition in media being “like a child’s game played over and over with variations of a familiar theme” thus aiding in allowing the consumer to digest the information being given.

Examples of the Play Theory can be seen in many modern day advertisements with a well-received, award winning example being Apple’s “Get-A-Mac” campaign which depicts a two speakers representing an Apple Mac, and the other, a Windows PC; the advert then provides humorous, entertaining and engaging comparisons between the two products with it, of course, highlighting the Apple Mac’s feature over the PC. An analysis of the campaign  (Rhoads, 2007) shows that one month (June 2006) after the beginning of the Get-A-Mac campaign, Apple saw the increase of sales with approximately 200,000 additional Macs being sold, followed by a sales high  in the following September.

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