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NAME OF COURSE: MA MARKETING COMMUNICATIONS

MODULE REFERENCE NUMBER: 4MMC7A5

YEAR OF ENTRY: 2013

HOST SCHOOL: WESTMINSTER BUSINESS SCHOOL

STUDENT NAME: DIONIS KOLE

STUDENT NUMBER: 141535655

PROJECT TITLE: AN IMC CAMPAIGN PLAN FOR THE RE-POSITIONING OF HTC

CORPORATION FROM THE PREMIUM TO THE MID-END SMARTPHONE MARKET.

DATE OF SUBMISSION: 27/01/2014

AKNOWLEDGMENTS

I would like to dedicate this project to my parents for their never-ending support

throughout my studies. Thank you for letting me to follow my dreams and always

being there for me.

Furthermore I would like to thank all the MAMC lecturers for their endless stream of

knowledge they transferred to me and for inspiring me to always become better and

have a thirst for knowledge. A big thank you to my supervisor Anne Barker who was

always there to support and guide me thorough the year.

It has been a wonderful journey filled with wonderful, passionate, smart and inspiring

people. Thank you all for making this journey of one year filled with moments I will

cherish for life.

0. EXECUTIVE SUMMARY This report provides an analysis and evaluation of the current financial stability,

market analysis, marketing communications, internal and external issues of HTC

Corporation. In 2013 HTC had one of its worst years ever with the brand operating

with £63 million profit loss in Q3 of 2013 while narrowly avoiding another loss on the

next quarter due to selling its stake in Beats Audio. An in depth analysis conducted

showed that HTC’s downfall is attributed to not one but many issues. Some of the

main factors are competition from established brands in the premium segment, lack

of marketing budget and the loss of touch with its consumers. HTC relies only on

smart phones for its revenue while its competitors have a number of other products

that generate income. Moreover HTC produces more than 30 devices each year

which do not sell due to lack of marketing budget. This has resulted in many other

issues, namely lack of long term support of devices which has driven many

customers away.

After evaluating the forces in the market it was identified that the biggest opportunity

for HTC comes by re-positioning in the mid-end market. An integrated marketing

communications campaign is proposed with a £6 million budget for the UK market

which will generate an ROI of 1:3.2 and an estimated increase of £19 million for the

6 months of the campaign. The integrated campaign will combine marketing

communications tools to reach the tech savvy 16-34 target audience which was

identified as the most profitable and identifies with the values HTC as a brand has.

The campaign will use a combination of sales promotions and events which will

engage the consumers and make them feel part of a culture and add value to the

brand. The IMC aims to reposition HTC in the mid-end market and adopt a long term

strategy which will bring HTC back to the forefront of the smartphone market for the

coming years.

This recommendation was based on the best available data from a number of

reliable sources including HTC’s own reports. However there might be differences

between the report and actual situation based on the limitations of the sources and

the lack of insider information.

PROJECT WORD COUNT - 16231

Contents 0. EXECUTIVE SUMMARY ........................................................................................................................ 3

1. OVERVIEW AND CLARIFICATION OF THE TOPIC .................................................................................. 6

1.1 Why HTC? .................................................................................................................................. 7

2. ABOUT HTC Corp. ................................................................................................................................ 9

2.1 Brief History .................................................................................................................................. 9

2.2 Financial Performance ................................................................................................................ 11

2.3 Organisational Structure ............................................................................................................. 15

2.4 The scope of HTC’s business ....................................................................................................... 16

2.5 The future of HTC ........................................................................................................................ 17

3. RESEARCH SOURCES .......................................................................................................................... 18

4. MACRO ANALYSIS OF HTC ................................................................................................................. 19

4.1Market Analysis ............................................................................................................................ 20

4.2 PESTEL analysis of the UK market ............................................................................................... 22

4.2.1 Implications for HTC ............................................................................................................. 23

4.3 Porters 5 forces ........................................................................................................................... 24

4.4 Competitors Analysis .................................................................................................................. 26

5. MICRO ANALYSIS OF HTC .................................................................................................................. 27

5.1 SWOT........................................................................................................................................... 27

...................................................................................................................................................... 27

5.1.2 Strategies. Strengths /Opportunities/Weaknesses/Threats ................................................ 28

5.2 Ansoff’s Matrix ............................................................................................................................ 30

6. MARKETING OBJECTIVES / STRATEGIC CONTEXT ............................................................................. 32

7. CAMPAIGN OBJECTIVES AND SCOPE ................................................................................................ 33

7.1 The role of IMC in Marketing Management ............................................................................... 33

7.2 IMC objectives and purpose ....................................................................................................... 36

7.3 The IMC Objectives ..................................................................................................................... 38

8. TARGET MARKET AND CUSTOMER PROFILES ................................................................................... 40

8.1 Geo-demographic classification (ACORN) ................................................................................... 41

8.2 Values/Attitudes & Lifestyle segmentation framework ............................................................. 42

8.3 Sample Consumer Profiles .......................................................................................................... 44

8.4 Means End Chain ........................................................................................................................ 45

9. Branding issues of HTC ...................................................................................................................... 47

9.1 Brand Wheel of HTC One ............................................................................................................ 47

9.2 Keller’s Brand Equity Model ........................................................................................................ 48

10. COMMUNICATIONS AND CAMPAIGN STRATEGY ........................................................................... 51

10.1 Campaign Message ................................................................................................................... 51

10.2 Brand Image .............................................................................................................................. 51

10.3 Campaign Strap Line ................................................................................................................. 52

10.4 Positioning statement of HTC ................................................................................................... 52

10.4 Message Delivery Tools............................................................................................................. 53

10.5 Push Strategy ............................................................................................................................ 54

10.5.1 Internal Marketing ............................................................................................................. 54

10.5.2 Point of Sale Marketing ...................................................................................................... 54

10.6 Pull Strategies ........................................................................................................................... 55

10.6.1 Experiential - Events........................................................................................................... 55

10.6.2 Reference Groups .............................................................................................................. 55

11.1 Campaign Flow .......................................................................................................................... 58

11.2 STAGE 1 ..................................................................................................................................... 58

11.2.1 Advertising ......................................................................................................................... 58

Table 7: Channels and frequency of TV ads .................................................................................. 59

11.2.2 Print .................................................................................................................................... 59

11.2.3 Out Of Home ...................................................................................................................... 59

11.2.4 Public Relations .................................................................................................................. 60

11.3 Stage 2 ....................................................................................................................................... 60

11.3.1 Events ................................................................................................................................. 60

11.3.2 Online ................................................................................................................................. 61

12. Campaign Schedule ......................................................................................................................... 61

12.1 MEDIA TIMELINE ....................................................................................................................... 62

13. BUDGET ........................................................................................................................................... 63

14. CAMPAIGN EVALUATION ................................................................................................................ 64

14.1 Campaign ROI ............................................................................................................................ 64

14.2 Pre-Test ..................................................................................................................................... 65

14.3 Continuous Testing ................................................................................................................... 65

14.4 Post-Test ................................................................................................................................... 65

15. Vertical Integration ..................................................................................................................... 66

15.1 Horizontal Integration ............................................................................................................... 66

16. REFERENCES .................................................................................................................................... 67

1. OVERVIEW AND CLARIFICATION OF THE TOPIC

The purpose of this document is to provide supporting evidence and present a

compelling marketing case for an integrated marketing communications (IMC)

campaign to re-position HTC Corp in the mid-end smartphone market, increase

preference among the 16 million of 16-34 target audience in the UK (ONS, 2011),

rebuild HTC’s reputation as an innovative, quality original equipment manufacturer

(OEM) and increase the market share in the UK from 10.9% to 12% by the end of

the campaign in May 2014. The IMC focuses on targeting consumers who are trend

setters, do not follow mainstream culture, like to be unique, are tech savvy and love

art, fashion and music.

In 2013 HTC Corporation is facing a big issue with its brand. It has a category

changing product but zero credibility as a strong innovative brand and very

disappointing sales, many consumers and market analysts believe it is on the verge

of falling down the path of RIM and other manufacturers in the past. HTC One when

launched in April 2013 was and continues to be one of the best smartphones in the

market gaining many awards for being the best smartphone of the year from some of

the most credible tech review companies but those have not translated into sales yet

with HTC selling a mere 5million (Poon A., 2013) units globally in the first two

months the smartphone has been in the market. HTC has not stopped pushing the

phone into the market; the company has been very aggressive in online media

advertising and has introduced many color variations of the phone, with the latest

being the gold HTC One in December 2013, to make it more desirable. The

expected outcome of the IMC is to reposition HTC from the ‘worst’ of the premium

segment to the ‘best’ of the mid-end market with a focus strategy on a niche

segment. To achieve the re-positioning a re-launch campaign is proposed with a

budget of £6million for a six months period in the UK market. The IMC will drive HTC

in a new strategic direction as a brand, making it profitable again and establishing its

competitiveness in the smartphone market once again but more importantly give

HTC corp. a new strategic direction for the future.

1.1 Why HTC?

Back in 2010, HTC’s ‘Desire’ and ‘Wildfire’ ranges won consumers over and brought

the brand to the fore of the smartphone market. Since then, however, the brand has

launched a plethora of phones – within the same range – which many consumers

struggle to differentiate between. For example, in the ‘Sensation’ range, HTC

launched the ‘Sensation’; ‘Sensation XE’ and ‘Sensation XL’; a strategy that

undermined its proposition and hampered the brand. Furthermore, HTC has decided

to continue this strategy with its new ‘One’ range. (YouGov, 2013) To put it in

perspective, in 2013 HTC launched more than 25 smartphone devices (HTC, 2013),

Samsung just eight and Apple two devices, the iPhone 5s and 5c. Moreover the

smartphones Samsung and Apple have launched have a clear differentiation

between them and are targeted to specific audiences while HTCs handsets have no

clear differences in the eyes of the consumers. Furthermore all of the devices the

two OEMs launched were supported by large marketing budgets while HTC had a

limited budget even for its flagship phone. Moreover HTC parted with Mother, its

advertising agency who had won the £100m global account a year earlier, and

decided to do the marketing in-house. (Raeburn S., 2013) This resulted in

devastating sales for most of the handsets with the HTC First or otherwise the

Facebook phone being one of the biggest tech. flops of 2013. (Kalinchuk A., 2013)

Moreover HTC One’s launch was delayed due to component suppliers being unable

to deliver on time and due to manufacturing chain problems. (Miller M., 2013) The

hype around the HTC One launch was high and the expectations the company had

for the handset were very optimistic. Initially the phone was set to launch before the

also highly anticipated competitor smart phone but those issues delayed the release

until after the Samsung’s S4 was on the market and ‘stole’ many of HTCs customers.

HTC lost its opportunity and momentum and the initial sales were disappointing.

HTC’s fall is also followed by some of its key members leaving the company, even its

CEO and co-founder Peter Chou stated in an interview that if the phone does not

perform well in the market he will resign his position and leave HTC. (Ziegler C.,

2013) Moreover HTC suffered its first ever loss of £62m in September of 2013 in the

16 years of the company’s history and now operates in cash flow negative(Kelion L.,

2013). At the same time Samsung was making record profits. (Kelion, L., 2013) This

is a clear indication that changes need to be made in many levels in the company

and this IMC aims to address and propose solutions to those issues.

The plan identifies an opportunity for HTC to establish strong long term presence in

the mid-range market and go back to profitability after the £6.3 million loss in Q3 of

2013 in the UK. The overall aim of the IMC is to establish HTC as a mid-end high

quality manufacturer in the UK. The IMC campaign will be based on the re-launch of

the highly successful flagship HTC One with a lower price to reflect the mid-end

market. The reasoning behind this is to lower the margins and increase quantity of

items sold to clear stock prior to the new generation flagship phone of HTC. The UK

smartphone market is highly competitive and very dynamic with two OEMs,

Samsung and Apple, having almost half of the market share but very competitive at

the lower end with companies like LG, Huawei and Motorola fighting for a share of

the market. The smartphone market has shown a slower increase in 2013 but a

steady increase nonetheless with only 68% of the phones used in the UK being

smartphones there is clearly room for growth. (Euromonitor, 2012).

The IMC will be supported by sales promotions, public relations, print advertising,

digital media, sponsorship and finally out of home advertising in order to effectively

and efficiently reach the target audience during the four month campaign which will

run from December 2013 to end of May 2014. The proposed budget for the IMC is

£6 million, half of what HTC spent in the UK for the launch of HTC One earlier this

year. HTC holds a 10.9% market share in the UK, taking the third place in the

smartphone market after Samsung and Apple. (IDC, 2013)

2. ABOUT HTC Corp.

2.1 Brief History

HTC Corporation is a Taiwanese manufacturer of smartphones headquartered in

New Taipei City, Taiwan, founded in 1997 by H.T Chao and Cher Wang. Initially

HTC was the behind-the-scenes designer and manufacturer of many of the most

popular branded mobile devices on the market.

Starting in 2006, HTC began manufacturing products under its own brand,

introducing in the market Android and Windows operating devices. HTC has always

innovated and has led the way in the mobile manufacturing business.

Some of the highlights are showcased in Figure 1 below including the 2002 Windows

phone which was the first Microsoft powered smartphone and the first Android phone

in 2008 which revolutionised the industry and today is the most popular mobile

operating system followed by Apple’s iOS and Windows Phone.(IDC, 2013) In June

2008, HTC changed its official name from High Tech Computer Corporation to HTC

Corporation and in October 2009 launched the brand tagline "quietly brilliant", and

the YOU campaign, HTC's first global advertising campaign. (Nita,I, 2009) on 16

February 2011, the GSM Association named HTC the "Device Manufacturer of the

Year" for 2011. In April 2011, the company's market value surpassed that of Nokia,

making HTC the third-largest smartphone-maker in the world behind Apple and

Samsung. (Kennemer, Q., 2011) In August 2011, HTC confirmed a strategic

partnership with Beats Electronics involving acquiring 51% of Beats' shares while on

27 September 2013, HTC announced that it sold back all remaining shares of Beats

to Beats Electronics in an effort to inject cash in the company. (Yu-Huay Sun, 2013)

In August 2013, HTC debuted the new "Here's To Change" global marketing

campaign featuring actor Robert Downey, Jr., who signed a £7.5 million, two-year

contract to be HTC's new ‘’Instigator of Change’’. HTC began airing the new

marketing campaign on YouTube in August, prior to the campaign's appearance in

television and cinema advertising schedules. (Hamburger, E., 2013)

Mid 2013 the HTC One model was released in and this was followed by the HTC

One Mini shortly afterwards and the larger version HTC One Max later. Global sales

of the HTC One were lower than those for Samsung's Galaxy S4 flagship handset

and HTC recorded its first ever quarterly loss in early October 2013 a shortfall of just

under £62m. Marketing problems were identified by HTC as the primary reason for

its comparative performance, a factor that had been previously cited by the

company. (Kelion, L., 2013) However marketing issues were only part of the

problem. HTC’s fall is also followed by some of its key members leaving the

company, including key staff in the UK such as the chief of marketing, even its CEO

and co-founder Peter Chou stated in an interview that if the phone does not perform

well in the market he will resign his position and leave HTC. (Ziegler C., 2013)

2.2 Financial Performance

On April 19 2013 HTC released their latest flagship smartphone called the HTC One.

In 2012 HTC had introduced plenty of smartphones on the ‘ONE’ line such as the

One X, One S, and One V. Then the One SU, One SV, One VX, several Desire

devices, and the Butterfly. Unfortunately, 2012 was one of the worst years in the

company’s history and things didn’t go as planned. The One was initially planned to

launch before the release of Samsung’s Galaxy S4, but supply and production

issues left consumers frustrated and HTC losing its chance of directly attacking its

biggest competitor (Wu J., 2013). Even though HTC One has won the critics and

those who already own the device calling it the best phone ever made, it still hasn’t

gained the much needed translation of those reviews in sales. The main reason is

that even if someone likes the phone and wants to purchase it being able to find it in

the market was extremely hard during the first month of circulation due to production

issues. So unless someone is a very loyal customer of HTC he has to look for an

alternative (Clove, 2013). HTC has overcome those issues and now the production

of the phone is doubled. Currently, the HTC One is in-stock for delivery from mobile

networks Vodafone, Three, O2, Orange, T-Mobile and EE, along with mobile phone

retailer Phones4U. (Halfacree N., 2013) Therefore it is obvious that at least for the

UK market supply issues have been somewhat overcome but it may be already too

late. HTC has been successful in marketing its device to retailers and major mobile

networks but not so to the end consumer.

Even though HTC’s marketing budget for the UK is nowhere near its major

competitors the company doubled its budget for the launch of HTC One to £10 mil

and had a notable presence in the above the line media as well as new media

targeting its new target market with a fresh and much different approach than in the

past (Reynolds D., 2013).

Graph 1. Financial performance 2009-2012

To gain a further understanding of HTC’s financial performance over the years a

financial analysis of the revenue and profits was conducted. A series of bad strategic

decisions, bad marketing communications and manufacturing problems have taken

HTC in a continuous downfall reaching to the current losses of 2013. Due to bad

financial performance and in desperate need of cash flow the company sold its

remaining 25% stake in the Dr.Dre Beats audio company for £163m. Beats will also

repay a £91m promissory note plus interest to HTC by the end of 2013. (Bloomberg,

2013)

Table 1. HTC Financial Performance year on year 2009 – 2012

YEAR 2009 (m£) 2010 (m£) 2011 (m£) 2012 (m£) Change (11-12 %)

TOTAL REVENUES 4,830.40 9,319.00 15,571.50 9,661.90 -37,9

GROSS PROFIT 1,543.20 2,803.70 4,406.00 2,437.90 -44,7

PROFIT MARGIN 32% 30% 28.3% 25.3%

Source: HTC annual report 2012

0

5000

10000

15000

20000

2009 2010 2011 2012

HTC Financial Performance (m£)

Revenue Profit

Source: HTC Annual Report 2012

Graph 2. Monthly Revenues of HTC 2013 (Consolidated information)

Source: HTC Monthly Financial Report 2013

As can be seen from table 1 above HTC saw steady growth from 2009 to 2011 with

revenues reaching at £15.5 billion for 2011. HTC lost focus and efficiency, Peter

Chou admitted "The fast growth from the last two years has slowed us down; we

have people in meetings and talking all the time but without decision, strategic

direction or sense of urgency" he said. HTC has been struggling to connect with its

consumers for a while now but still hasn’t found a clear message to communicate.

The company acknowledges that it has lost its connection to the consumers,

especially with Samsung and Apple putting billions in their marketing the company

struggles to compete. Another reason for HTC losing its audience is competition

from cheap Chinese manufactures like Huawei and ZTE who have seen their largest

year or year growth. (Dou E., 2013) From Graph 2 it can be seen that 2013 was not

a good year for HTC. With the release of HTC One in May the company saw an

increase of almost 50% in revenue however in the following months the growth didn’t

continue and the downfall continued with 2013 being one of the worst years in the

company’s history.

518.3

379.31

529.84 653.58

967.5

736.44

524.7 439.3

605.54 500.25 516.16

HTC MONTHLY REVENUE 2013 (m£)

Graph 3. HTC Revenue growth quarter on quarter 2009 – 2012

HTC's global smartphone market share fell to 2.5% in the first quarter of 2013 from

9.3% in first quarter of 2011, according to market-research firm Gartner.

HTC’s Q2 report for 2013 showed that despite the launch of the HTC One its profit

plummeted by 83% (Epstein Z., 2013) and results for Q3 showing a further decline of

40% (Wu, 2013). The company’s struggle began on Q3 of 2011 when net profit of

HTC fell 25% year-on-year at £235m in the three months to December while

Samsung, HTC’s main competitor reported its best year ever with a 73% jump in

operating profits to £2.9bn for the last three months of 2011(O'Reilly L., 2013).

2.3 Organisational Structure

Graph 3. Organisational structure of HTC Corporation 2013

Source: HTC, 2013

Graph 3 shows the organisational structure of HTC as of 12 September 2013 (HTC,

2013). HTC's chairwoman is Cher Wang. Peter Chou is the CEO who leads the

global product sales is also responsible for production promotion, customer relations,

customer service and communications; HT Cho is director of the board and chairman

of HTC Corporation. HTC's CFO is Hui-Ming Cheng. The main departments where

HTC spends most of it finances are the research and development department and

the global marketing department (HTC annual report, 2012).

2.4 The scope of HTC’s business

HTC Corporation engages in the design, development, and manufacturing of

smartphones in Taiwan. The company distributes its products through mobile

operators and distributors in Europe, the United States, and Asia. HTC’s handsets

are available under its own brand and sometimes are individually customized for

operators, device partners and sometimes for original equipment manufacturer

(OEM) partners. The company also owns Dopod, S3 Graphics, Dashwire, Zoodles

and Saffron Digitalas which are subsidiary companies. HTC is also a member of the

Open Handset Alliance. HTC’s products are sold under various brand names, such

as HTC, Dopod, and Qtek and are often rebranded by major telecommunication

carriers. Its products also include pocket PC phones (touch phone), PDA phone and

smart phones. HTC also manufactured the Sony Ericsson XPERIA X1 and HTC

dream (T-mobile G1) for T-mobile among many others. Chunghwa Telecom Co. Ltd.

has teamed up with Microsoft Corporation, HTC Corporation and others to start

building an e-book business for Chinese language materials. China Mobile Limited

and HTC Corporation agreed to work together to develop products for China’s third

generation mobile network. They signed an agreement to start the partnership,

focusing on product and technology development. HTC will develop advanced

wireless broadband products based on the TD-SCDMA standard, and will work

closely with China Mobile to design and make products tailored to the needs of the

Chinese market. (BusinessWeek, 2013) In 2013 HTC partnered with Facebook to

launch the first mobile phone which had Facebook’s own launcher on top of the

Android operating system. The idea on paper sounded good but the execution was

very bad and received a lot of criticism. Facebook had a deal which named HTC the

only OEM who had the right to use the Facebook launcher. However Facebook did

not honour the deal and released ‘Facebook Home’ on the Google play market which

made it available for all android phones. This made HTC First an already undesirable

phone one of the worst selling HTC phones of all time and cost the company a lot.

The phone was planned to circulate in many markets including the UK in May 2013

but it never made it because HTC terminated its production. (Langley H., 2013) HTC

also has a long standing relationship with Google, in June 2013 HTC released in

partnership with Google the HTC One Google edition which is on sale on the Google

Play market. The smartphone is currently available only in the United States but is

expected to arrive in the UK towards the end of 2013. (Tamblyn T., 2013).

2.5 The future of HTC

We are dedicated to creating a customized user experience and believe that each

mobile device needs to fit its owner, and not the other way around. What we make is

not merely the product of focus group tests, but of observing and honouring how

individuals choose to interact with technology. (HTC, 2013) This is how HTC defines

its values and these are what guide the company to the future. However, apart from

values and vision the company needs to set new strategic directions which will take

the company away from the path of RIM and Palm. HTC has already launched in

mid-December 2013 four new devices, adding up to the already very broad range of

devices, for the mid end market in an effort to regain market share. The HTC Desire

line-up includes the Desire 700, 601, 501 and 300. These devices are priced lower

than the HTC One flagship and have compromises when it comes to specifications in

order to reflect the lower price with the UK market only introducing the 601 and 300.

(Grey N.,2013)

In early 2014 HTC will also work in partnership with Amazon to develop Amazon

phones which will be distributed to Prime members of the e-commerce website. This

partnership could be a lifesaving deal for HTC and bring in the company the much

needed financial boost. Another potential partner for HTC can be Lonovo, the

Chinese market leader in the PC market, who also recently made a dynamic

entrance in the smartphone market but this has not yet been confirmed.

(Bloomberg, 2013)

The downfall of HTC has played a major role in the Taiwanese economy and the

11.6% decline of exports is attributed by a large proportion to HTC. This is why the

Taiwanese government is working on a possible plan to bail out HTC in 2014 so that

it is not sold. (Grey, N., 2013)

3. RESEARCH SOURCES

The data used for completing this project came from secondary resources. To gain

an understanding and an overview of the market Euromonitor was used to source

local data about market size, market shares and growth of the market. Mintel is

another source used for understanding trends in the market, and the target

audience. Furthermore Kantar worldpanel ‘UK digital trendies’ report was used for an

in depth understanding of the target audience for the campaign.

For the understanding of the smartphone market, specialized market research

companies were used. IDC’s worldwide annual smartphone tracker offers broad and

narrow information about brands, companies and market shares. Strategy Analytics

offered an in depth analysis of the market dynamics and forecasts for the future.

YouGov’s SMIX (Smartphone Mobile Internet eXperience) tracker offers insights

about consumer trends in the UK and was used to develop objectives and strategies

for HTC UK.

WARC was used to source past marketing communications of HTC and competitors,

Samsung and Apple for the UK in the past and understand the positioning of each

brand in the market.

HTC’s and competitor annual reports, CEO Webcasts to investors and interviews of

executives were used to source and analyse internal data. Furthermore Business

source compete was used to source relevant news from the media.

4. MACRO ANALYSIS OF HTC

A report released in July 2013 by Strategy Analytics shows that smartphone

shipments for the second quarter of 2013 rose 47% from a year earlier. According to

the report, smartphone shipments for the April-June period hit 229.6 million units

globally. Samsung ranked number one with a total of 76 million units shipped

accounting for 33.1% of the market. Second in the list is Apple Inc. with a market

share of 13.6%, significantly lower than the 16.6% recorded one year ago. Even

though Apple’s shipments totalled 31.2 million units, up from 26million of the

previous year (Wei-lan C., 2013). This rise in units shipped is due to increased

demand for smartphones but as an International Data Corporation report released on

the 25th of July 2013 states that Apple recorded its lowest year on year growth rate

in almost 4 years. Furthermore the same report states that although Samsung still

remains the undisputed market leader it also had a 2.4% decrease on market share

since the previous quarter (Page C, 2013). This is also supported by a trend that

consumers want premium products in small prices and this is why companies like

LG, ZTE and Lenovo have had their best year on year growths yet, putting them in

the top 5 with Samsung and Apple (Miller M., 2013). The UK market is not so

different, a report by Kantar Worldpanel ComTech shows that HTC’s market share in

the UK was edging up to 9.1% during the first 3 months of 2013 but Samsung

remained the top smartphone manufacturer with 36.2% of sales, with Apple just

behind at 29% (WARC, 2013). Moreover a research from analytics firm Flurry shows

that Android devices have surpassed the iOS devices by far and currently Google

says that everyday 1.5 mil android devices are activated globally (Dredge S., 2013).

Germany and the UK also saw double-digit increases of 12.1 points and 10 points

respectively to 71% and 58.3% in Android smartphone sales (WARC, 2013). In

addition Samsung and Apple are in a constant war of advertising spend, both

companies spend large amounts for marketing and recently both of them have

increased their ad spend leaving HTC way behind with only 1/10th of what they

spend (Rapoza K., 2013). The HTC One offers to the company the opportunity to

overcome the mistakes it made and penetrate in the market gaining some of the lost

momentum with its consumers

4.1Market Analysis

The UK smartphone market is worth £2,5billion and is a key market for all vendors.

(Euromonitor, 2012) A research from O2, the UK telecoms company, found that

consumers spend more time on their smartphones browsing the web than making

phone calls. According to the report smartphone owners spend on average 2 hours a

day using their phones. Browsing the internet, checking social networks and playing

games are the top 3 activities UK consumers do the most on their smartphones with

phone calls coming on the 5th place. (O2, 2012) Another area of interest is the

vendors’ market share in the UK. A Strategy Analytics report for Q2 of 2013 shows

that Apple market share continues to decline to just 13.6% with consumers preferring

cheaper Android phones. Samsung recorded a 56% increase in profits from 2012

with £1.9bn being from the smartphone devices making it the most profitable

smartphone maker for 2013. (Worth, D., 2013) Korean firm LG holds a 5.3% of the

market followed by the Chinese ZTE and Huawei with 5% and 4.8% market share

respectively. (Stevenson, A., 2013) The Android operating system gained the first

place in 2011 overtaking Nokia’s Symbian and in 2013 Android accounts for 79.3%

of the operating system market share worldwide with Apple’s iOS second at 13%

according to IDC’s quarterly worldwide mobile tracker. (IDC, 2013) In the UK Android

accounts for 58% of the market showing slow but steady increase with iOS holding

27% of the market but has shown a decline since July 2013.

Source: IDC Worldwide Mobile Phone Tracker, October 29, 2013

Samsung 54% Apple

22%

Huawei 8%

Lenovo 8%

LG 8%

Top Five Smartphone Vendors market share Q3 2013 (%)

Source: Kentar Worldpanel, UK smartphone market share, 2013

Moreover in the second quarter of 2013 smartphones outsold feature phones for the

first time. A report from Gartner showed an increase of 46.5% in smartphone sales

from 2012. In the UK smartphones account for 68% therefore there is a lot of room

for growth in the market.

`*

4.2 PESTEL analysis of the UK market

FACTOR EVENT IMPLICATION IMAPCT

POLITICAL -HTC lost a lawsuit from Nokia for an infringement of one of Nokia’s patents. HTC's One mini was banned from selling starting December 6 but HTC filed for an appeal to the decision and its phones are back on the market.

If HTC loses the appeal its phones in the ONE series could be banned from being sold in the UK market.

High

ECONOMICAL -UK growth has outperformed all expectations this year, and is on course to record a fourth successive quarter of expansion. - Unemployment has shown a decrease compared to 2012 but wages gave been stagnant.

Consumer spending may affect the industry but in a competitive market HTC might be the weak link

Moderate

SOCIAL -Smartphone penetration in the UK is above 68% for Octomber 2013. -Multi-functionality of smartphones. Smartphones have replaced many single feature devices in our lives and are used for shopping, photos, music etc. -Increase of market share for cheaper brands (LG,Huawei)

This affects the whole market and is also an opportunity for HTC to regain market share by improving its products and its communications.

Moderate Moderate High

TECHNOLOGICAL -Technology evolves in rapid speeds in the smartphone market with every new device pushing the limits. -Product circles are very short

HTC has a long history of firsts (Android, Windows, 4G) and puts large sums in R&D. The HTC One also holds innovations like the front stereo speakers and the Ultra pixel Camera.

Moderate/ High

ENVIRONMENTAL -Consumers are sensitive to environmental impact and companies are pressured to improve their sustainability policies. -Extreme weather conditions can delay shipments of new products

HTC has a green policy and the materials the company uses are environmentally friendly and recyclable. HTC One has shipped and is available in large stocks in the UK therefore this can only be an issue for new products but is also unlikely to have a lasting impact.

Low Low

LEGAL -Patent and copyright infringements -Privacy protection laws

HTC has been facing lawsuits from Nokia and its products can get banned in the UK if the lawsuits are lost. Smartphone manufacturers have been accused of selling consumer data to advertisers. Many times this is attributed to apps but manufacturers are also required to make changes.

High Moderate

Source: Own work, HTC, BBC, The telegraph, Gartner, Kantar, IDC

`*

4.2.1 Implications for HTC

Table 2. Highest impact on HTC

High Impact

Hig

h C

ert

ain

ty

-Ongoing lawsuits from Nokia may ban the HTC One being in the UK market -Smartphone penetration is above 68% in 2013 in the UK market for the first time ever showing that consumers need more functionality from their phones. -The move from feature to smartphones is largely attributed to the drop in price for smartphones and the low price brands. -Competition from cheap brands is fierce and LG, Lenovo and Huawei have had their strongest years yet.

The smartphone market is very dynamic and is constantly changing. The speed the

technology evolves is tremendous and each year brands push the limits of what a

smartphone can do. Only a few years ago we would never imagine how far

technology would go. Now the competition for a place in the market is high with

many brands joining in, sometimes successfully like Huawei and sometimes not so,

like HP. The dynamics of the market affect HTC which has lost its connection to the

consumers and still hasn’t found a position to place itself in the market. The

company has been releasing phones for all ranges of the market from entry level

handsets to premium phones like the HTC One hoping that one might work.

Unfortunately this hasn’t been the case and the market has been dominated from

two brands Samsung and Apple and the low end with cheaper brands who are

gaining market share. The reason for this is that consumers know that a phone will

last for one year and then the next big thing is going to appear and they will change it

so they don’t want to spend premium for expensive devices. HTC has been too

distant from the market, trying to innovate and make the next best smartphone rather

than pay attention to what the consumers need. The trends that HTC should pay

attention more and should adopt its strategy are the smartphone penetration and the

rise of cheap brands. This can pose a big opportunity for HTC if the brand positions

itself accordingly in the market. HTC should limit the devices to four or five and have

a clear differentiation between them so that consumers don’t keep getting confused.

4.3 Porters 5 forces

Graph 4. Porter’s Five Forces for HTC

Adopted from: Competitive Strategy: Techniques for Analyzing Industries and Competitors, Michael E. Porter

THREAT OF NEW ENTRANTS – LOW

The financial investment, technology investment, R&D and marketing budget needed

to compete in the fast moving market of smartphones is extremely high.

For someone to compete with the already established brands is extremely unlikely,

unless they introduce a product that is different and innovative like Apple did with the

iPhone in 2007.

THREAT OF SUBSTITUTES – LOW

The added functionality that smartphones and mobile phones have over single

feature products such as cameras, music players and internet connectivity make

them more attractive and convenient for the consumers.

BARGAINING POWER OF BUYERS – HIGH

There is a wide variety of smartphone brands with different features, operating

systems and price therefore consumers can choose.

With a lot of the HTC competitors all offering similar packages (e.g. unlimited texts

and calls) the industry is very price sensitive with customers seeking out the best

value for money.

THREAT OF NEW ENTRANTS

LOW

THREAT OF SUBSTITUTES

LOW

BARGAINING POWER OF SUPPLIERS

MEDIUM

BARGAINING POWER OF BUYERS

HIGH

COMPETITIVE RIVALRY

HIGH

Brand loyalty is high in the market so for consumers of other brands to switch to HTC

may be difficult.

Many consumers have contracts which are long term which makes switching even

harder.

BARGAINING POWER OF SUPPLIERS – MEDIUM

Original equipment manufacturers rely on key suppliers for quality component parts

at competitive prices but there are many suppliers where HTC could switch to.

Android is an open source operating system therefore HTC does not have to rely on

Google on it like iPhone and Nokia on Microsoft.

COMPETITIVE RIVALRY – HIGH

Apple and Samsung currently dominate the market. New entrants may find it

extremely high to compete and gain economies of scale for market share against

leading brands. However as we have seen in the past and recently with Blackberry

the market is unpredictable and once market leaders like Nokia can lose their place.

There is intense competition from low price brands such as LG and Huawei which

are gaining market share rapidly in the UK and driving prices down from leading

brands.

4.4 Competitors Analysis

The HTC One is an Android Jelly Bean, LTE handset with an aluminum unibody construction and features a 4.7-inch, 1080p display and Qualcomm's Snapdragon 600 chipset with a quad-core 1.7GHz processor. It comes with front- and rear-facing 1080p cameras with an f/2 aperture and optical image stabilization

The latest in the popular line of Samsung's Galaxy S smartphones, the Galaxy S4 ups the ante with a larger 5-inch 1080p display and 2600 mAh battery to match. Android 4.2.2 Jelly Beans runs on either an Exynos 5 or Snapdragon 600 processor (depending on region).

The successor to the iPhone 5, the 5S brings several new features to the table, most notably a gold color variant and fingerprint scanner called Touch ID. A significantly improved camera has also been added, offering fast and slow motion video along with a burst mode. The 5S is the first iPhone to run on a 64-bit architecture, which means improved performance in almost every way.

Availability date: April 2013

Availability date: Apr. 27, 2013

Availability date: Sep. 20, 2013

Price: £532* Price:£625.95* Price: £619*

OS: Android (HTC Sense 5) OS: Android (TouchWiz) OS: iOS

Screen: 4.7 inches Screen: 4.99 inches Screen: 4 inches

Rear camera: 4 megapixels (Ultrapixel)

Rear camera: 13 megapixels Rear camera: 8 megapixels

Sales: 5 million Sales: 40 million Sales: 7 million

Built: Aluminium Built: Plastic Built: Aluminium

Source: theverge.com, 2013 *All prices from Amazon.co.uk for the 16GB model

HTC has the better quality build and the most convenient and user friendly Android interface.

Pricewise HTC is also the more affordable from the three and has the advantage on the camera and

sound quality as well.

5. MICRO ANALYSIS OF HTC

5.1 SWOT

Strengths Weaknesses

- Among top innovating brands in the

technology industry - Best smartphone of the year (Stuff, T3) - Operating system, Android with HTC sense 5 - High end hardware - 5th largest smartphone manufacturer in the

world - Strong brand equity - Sponsorships (Mobo Awards, UEFA

Champions League)

- Limited marketing and advertising budget - High Price - Internal issues with employees leaving the

company - Bad financial performance since 2011 - No adaptation in the market needs - Weak supply chain - Lack of Integrated Marketing Communications - Unfocused strategy - No tablet devices

Opportunities Threats

- Popular in the youth, urban market - Mid-high market not overpopulated by

competitors - Partnerships - RIM exit from consumer market - Smartphone shipments rose 47% from 2012. - 4G LTE becoming widespread - Android 81% of market share in operating

systems. - iOs on the decline

- Strong competition in the upper market,

dominated by Samsung and Apple - Weak customer service and after sale support - Threat from cheaper manufacturers (LG,

Huawei) - Product cycles are getting short - Patents and intellectual property rights

Source: Own work, HTC, Business Insider, Financial Times, Bloomberg, Strategy Analytics, ComScore, Localytics, IDC, Statista

5.1.2 Strategies. Strengths /Opportunities/Weaknesses/Threats

Strategies for Strengths to meet Opportunities

- With RIM gone and iPhone declining HTC can win market share with a carefully targeted IMC campaign. - HTC needs to differentiate and highlight its core values as an innovative brand to the target audience and be consistent on its message - Increase awareness about the ongoing sponsorship activities

Strategies for Strengths to Defend weaknesses

-HTC should develop only a few devices; this will improve the production costs, supply chain, after sale service, customer relations and marketing communications. -HTC should lower the price of its flagship phone HTC One, use marketing communications to connect with its target audience and adapt to the market trends. -HTC should introduce a tablet in the market to gain market share in this booming market.

Strategies for opportunities to overcome weaknesses

-HTC should use focus strategy for a niche market targeting and benefit from the exit of RIM from the consumer market. -HTC should benefit from the rising market share of the Android operating system by adopting it prices to reflect the mid end market prices and combat the rising of cheaper devices from Chinese brands. -The premium market is very competitive with Samsung and Apple dominating the segment and the lower entry market is crowded with brands like LG, Huawei and Lenovo who compete for market share. There is no brand who offers premium quality with a reasonable price tag. HTC can dominate this segment with its flagship HTC One.

Strategies for weaknesses not to expose threats

-HTC should establish an integrated marketing strategy with a clear message and positioning in the market. -With the short product circles, lack of marketing budget to support its devices and many bad years financially, HTC should introduce in the market only a few devices and improve its customer relations.

HTC is an already strong established manufacturer in the smartphone market and

holds 10.9% market share in the UK. However the issues the company has been

facing both internally and externally have driven consumers to brands like Apple and

Samsung. HTC has an established brand but with the many devices that the

company launches in the market each year consumers are left confused and the

company has lost connection with its audience struggling to find a clear message

and position itself in the market. From the SWOT analysis the most appropriate

strategy that HTC can adopt long term is the exit from the premium segment of the

market and compete in the mid-end segment. Consumers who have the financial

ability have been drawn to the two dominating brands of the market while price

sensitive consumers choose cheaper brands like LG and Huawei who are having

their best year on year growth in 2013. For HTC to maintain a competitive advantage

and regain lost market share it needs to differentiate and offer consumers great

products with great value. The HTC One is a great opportunity for HTC to enter this

market. The smartphone has won many awards and is considered the best of 2013.

HTC has had many issues and when it doubled the production of the HTC One it

was already too late. Lowering the profit margins on the HTC One and introducing it

in the market with a lower price tag will solve the problem of the stock and will

reshape the perception of the consumers about HTC as the best value for money

manufacturer. This IMC for the HTC One does not aim to steal market share from

Apple or Samsung. The main goal is to gain the price sensitive consumers who

would otherwise buy a cheaper alternative brand and those who are first buyers of a

smartphone upgrading from a feature phone.

5.2 Ansoff’s Matrix

The application of Ansoff’s matrix determines potential strategies that could assist in

the achievement of the objectives set by the company (Wilson and Gillian, 2005).

HTC currently is following a product development strategy and operates in a broad

market. The company introduces many variants of the same product, for example

the HTC One, One mini and One Max in the same year. HTC also develops products

for different segments of the market and for different geographical locations, for

example the HTC Desire 700 is only released in the Asian market. Following this

strategy has led to countless problems for HTC. Developing so many products has

led to production line complications; an example of this was the delayed launch of

the flagship HTC One. Moreover consumers are left confused by the many devices

HTC introduces and go for another brand instead. Also having more than 30 devices

every year requires a lot of development after sale, consumers want to receive the

next update as soon as possible but HTC has developed its own version of Android

which means that supporting all the devices long term is nearly impossible due to the

costs and manpower it requires. After analysing the Ansoff matrix for HTC the most

appropriate strategies the company must follow are a combination of a price drop, to

enter the mid-end segment, target consumer who are trend setters as mentioned

previously and improvement of after sale services. In a more long term product

development strategy, HTC can consider entering the growing tablet market with two

new devices of 7inch and 10inch tablet devices.

Table 3. Ansoff’s Matrix

MARKET

Old Market New Market

PR

OD

UC

T

Ex

isti

ng

Pro

du

ct

Market Penetration

- Brand awareness through

marketing activities

(Champions League

Sponsorship)

- Improving internal operations

- Introduce a price cut on the

HTC One

Market Development

- Target different age

groups and

demographic

profiles from

current customers.

New

Pro

du

ct

Product Development

- Develop Tablet devices (both

7’ and 10’)

- Improve after sale

customer services (Fast

android updates, longer

support for the device)

Differentiation

6. MARKETING OBJECTIVES / STRATEGIC CONTEXT

The smartphone market in the United Kingdom has shown high growth in the last

few years with forecasts showing a further increase in the coming years as

smartphone penetration increases. HTC is a highly innovative brand that has shaped

the market to what it is today. The company was the first OEM to introduce Android

and now the operating system has more than 70% of the OS market share. The UK

is one of HTC’s key markets where it holds a 10.9% market share compared to the

4-5% in other countries. HTC has a strong brand and innovative products with the

HTC One being the top of the line. However for HTC to make a comeback in the

market and regain market share the following objectives must be achieved.

To increase the UK market share from 10.9% TO 12% by the end

of the campaign in May 2014, an increase of £31million in

revenue.

Achieve 60,000 new sales for the HTC one in the UK market by

the end of May 2014.

Generate 200 pieces of coverage in technology and consumer

media about the £80 cut in the HTC One price.

Position HTC successfully in the mid-end market using marketing

communications before the launch of the HTC One2 in the end of

May 2014.

7. CAMPAIGN OBJECTIVES AND SCOPE

7.1 The role of IMC in Marketing Management

There have been numerous attempts to capture the meaning of IMC in a few lines.

The most simple definition is that integrated marketing communications (IMC) is the

bringing together of all marketing communications objectives. A common

understanding of the IMC is that it brings all the elements of the promotional mix

together. One of the more recent definitions of the IMC process comes from Duncan

(2002) who states that IMC is a process for managing the customer relationships

that drive customer value. More specifically he said that it is a cross-functional

process for creating and nourishing profitable relationships with customers and

stakeholders by strategically controlling and influencing all messages to these

groups and encouraging data-driven, purposeful dialogue with them. Another

definition comes from Shimp (2000) who defined IMC as an organisation’s unified,

coordinated effort to promote a brand concept through the use of multiple

communications tools that speak with a single voice. It is important to clarify and

understand the value of IMC, because for HTC the lack of an integrated approach

has led to many issues and has confused consumers who moved to another

competitive brand. As Broderick (2005) mentions for integrated marketing

communications more than one creative treatment – message or image- may be

used but where more than a single treatment is employed they should be mutually

consistent. This has not been the case for HTC. The company has used many

marketing tools to promote its devices, sponsorship of the UEFA champions league,

advertising with Robert Downey Junior with the Here’s to change campaign and

others but none of them follow a consistent message or have the same tone of voice.

Apart from communications, as mentioned before, the company releases numerous

devices for all segments of the market with no differentiation at all or any marketing

budget which undermines the perceived value of the brand and has a negative effect

on brand equity. Therefore establishing an integrated marketing communications

approach is not only beneficial short term but for HTC is of vital importance. A

market is rarely seen as one large, homogeneous group of customers. Rather, it

consists of many heterogeneous groups, or segments. Marketing must be tailored to

the needs and demands of the desired segments. Therefore segmentation and

careful targeting is important for HTC. In doing this the company can position itself in

a specific segment of the market and focus on a specific target market.

There are a number of methods that are available for segmenting markets. These

methods can be broken into two broad categories based on customer characteristics

and aspects of the buying situation.

Segmentation based on customer characteristics includes:

• Geographic segmentation divides markets by geographic locations

such as nations, states, regions, or cities.

• Demographic segmentation divides markets based on demographic

variables such as gender, age, education, race, and life stage.

• Socioeconomic segmentation divides markets based on

socioeconomic variables such as income, education, and occupation.

• Psychographic segmentation divides markets based on personality

values or lifestyle. SRI’s VALS 2 is a popular approach to lifestyle

segmentation

Segmentation based on the buying situation includes:

• Behavioral segmentation divides a market into groups according to

their level of involvement with and purchase behavior toward a product

or service.

• Outlet types segments a market based on the type of store where a

product is sold, such as convenience, supermarket, mass

merchandiser, specialty

• Benefit segmentation divides markets on the basis of the specific

benefits or outcomes consumers want from a product or service.

• Awareness segmentation is based on the product knowledge of the

consumer.

Usage segmentation classifies customers based on their level of use of a product or

service. (Shultz, E., 1993)

Within the market that HTC operates the differentiation between the products

themselves is not big. More or less all products have the same technology, same

screen, high quality camera and generally offer the same benefits to the consumers.

This is why brands like Samsung and Apple invest so much money in advertising

and build a personality about their brands which clearly differentiates them from the

competition. To conclude, all aspects of Marketing Communications are used by

IMC’s strategic marketing model for building a strong brand through reliable and

interactive communication between organizations and their target markets. As the

relationships advance between organizations and their customers, brand building

activity continues by creating databases that continuously monitor and respond to

market needs. This in turn helps organizations in maximizing their profits. In the case

of HTC the most important aspect of the IMC is segmentation of the market and

identification of the target audience which will help the brand not only find a place in

the market but understand its place in the market more and develop and maintain a

long term strategy.

7.2 IMC objectives and purpose

Throughout the report the conducted research showed that there is a big necessity

for HTC to reposition in a different segment of the market and to carefully target a

segment of the market which is untapped by the current market leaders which are

Apple and Samsung. Secondary research conducted for the purpose of the

understanding of the market and the positioning of each brand in the market showed

that the mid-tier market is largely neglected by the leading brands. HTC and

Samsung have been releasing devices to reflect the mid end market however both

mainly focus on the premium market where they spend most of their advertising

spend and where most of the innovation is done in terms of progress in technology.

However none of the two brands are doing particularly well in the specified market

due to the release of devices which do not offer a good value for money to the

consumers and even though the prices range of the devices in the segment in the

segment is not largely different than those of the premium devices. The positioning

map below illustrates the proposed repositioning of HTC from the premium market to

the mid end market.

Figure 2: Positioning map of top smartphone manufacturers, 2013

Source: Own work, Based on secondary research data

Price Low Price High

Low End

High End

Figure 2 above shows the current situation in the market and where each brand is

positioned in it. The map shows both direct and indirect competitors of HTC. It is

clear that the smartphone market is an overpopulated one and a very dynamic

environment as well. It is clear that the premium segment where HTC operates is

overpopulated and very competitive. HTC has had many bad years continuously and

being competitive in the segment where it currently operates is nearly impossible.

This is why based on findings from the research conducted a repositioning of HTC is

proposed. As can be seen above there is a gap in the market which is largely

untapped by the large smartphone vendors. Only Google has been successful in this

segment of premium quality with a low price with its NEXUS range devices. Google

releases each year devices priced at around £340 with specifications that are the

same as those of the premium brands (Google Play, 2013). The NEXUS devices

have been some of the top selling devices in the market for the past two years

because technically they do not compete with any of the brands in the market. The

Google devices have been so successful because the perceived value of the

consumers is high. For HTC the success of the NEXUS brand in this segment

proves that it is a profitable one and that it is one with many loyal customers. It also

poses a big opportunity because what are the biggest strengths of HTC are also the

biggest weaknesses of the Nexus device. Namely the weak build quality and the

stock android interface are some of the weakest points of the Nexus devices while at

the same time HTC is praised and won many awards for the high quality in the

materials used on the HTC One and the HTC Sense 5 which is considered to be by

far the most useful and user friendly android interface on a smartphone to date.

Therefore while the philosophy behind the repositioning of HTC on the mid end

market is influenced by the success of the NEXUS devices they do not pose a direct

competitor to HTC. Another reason why this is not the case is because Google does

not target the mass market with the nexus line up but those who are more tech

savvy, the developers, those who want to get the android updates first. Having a

Nexus device requires a lot of technical knowledge and the interface is geared

towards a more techy audience. For HTC the opposite is the case. This is why the

re-positioning of HTC is the mid end segment is proposed. This will require a long

term strategy to be adopted by HTC but this IMC campaign aims to initiate the

process which will reposition the brand successfully in the mid end market. To

complement the marketing objectives set for HTC a re-launch campaign for the

current flagship device HTC One will run through different media channels for a six

month period prior to the launch of the new flagship device.

7.3 The IMC Objectives

According to Belch and Belch (2004), Integrated Marketing Communications

objectives are what various elements in the marketing communications program

will achieve, taking into consideration, tasks required to deliver the desired

message to the target audience. In setting the objectives for this IMC campaign,

consideration has been given to the current image and positioning of HTC and

matched against the desired image and positioning the campaign aims to achieve for

the HTC brand. One of the biggest problems HTC is facing at the moment is that it

has low awareness among its target audience compared to its direct competitors.

Furthermore a series of bad publicity in early 2013 took a big hit on HTC and

negatively influenced customers’ beliefs and attitudes towards the brand. This IMC

aims to address these issues. The model that is used to establish IMC objectives for

HTC is the hierarchy of effects model. The Hierarchy of Effects Model was created in

1961 by Robert J Lavidge and Gary A Steiner. This marketing communication model,

suggests that there are six steps from viewing a product advertisement to product

purchase.

Figure 3: Hierarchy of effects model, Robert J Lavidge and Gary A Steiner, 1961

Source: Smith, P., Strategic Marketing communications, pp 52

AWARENESS

KNOWLEDGE

LIKING

PREFERENCE

CONVICTION

PURCHASE

Co

gnit

ive

Co

nat

ive

Aff

ecti

ve

The smartphone consumer can be identified as a learning customer according to the

model. The involvement of the consumer is high prior to the purchase and the

consumer seeks technical information about the product through different channels

before he reaches the final decision. Consumers of this category make rational

decisions and pay attention to price when choosing a product they like. Specifically

for the mobile device market Kantar did a large scale research to understand how

consumers in this market reach a purchase decision. According to the report the top

four decision making influences were professional reviews, user reviews, advertising

and brand image.(Kantar Media UK, 2012) HTC lacks all of these and it is of vital

importance to address each and every of this issues with the appropriate marketing

communications tools. According to the model the most appropriate marketing tools

to reach this type of consumers is advertising, print media, online and direct mail. For

the purposes of this campaign all these tools will be used with the addition of PR.

(Solomon, M., 2010) Therefore for the purposes of this campaign and to achieve the

marketing objectives set earlier the following IMC objectives were set.

To reinforce and create awareness of HTC’s brand among 80% of the target

audience by the end of the six month campaign.

To successfully communicate the repositioning of HTC in the mid end market

and achieve a 70% comprehension of the benefits, values and attributes of

HTC One among the target audience.

Establish a 65% positive attitude and liking towards HTC for the six month

period of the campaign among the target audience.

Create preference towards HTC against competing brands among 45% of the

target audience.

Convince 30% of the target audience about the superiority of HTC One

compared to competing brands

Lead 6% of the target audience to purchasing behaviour in the 6 months of

the IMC campaign.

8. TARGET MARKET AND CUSTOMER PROFILES As mentioned previously in the report the target audience for this campaign is people

belonging in the age groups 16-34 and of the social class ABC1. The campaign will

run nationally through various media covering the whole of the United Kingdom.

According to census data gathered in 2011 in the UK there are 16,727,000 people

who belong in that group. However not all are suitable to be targeted for this

campaign. Social grade, as an occupation based classification system, is a

barometer of changes in occupations over time. Since the 1960s, social grade has

tracked the changing shape of the British workforce and as a classification system it

has developed over time as the workforce has evolved. Its strength lies in its

simplicity and its application as a discriminator, particularly for media consumption.

That is why it has stood the test of time (Ipsos Mori, 2009) According to Ipsos Mori

research only 56% of the 16.7 million in this age group are considered to be of the

ABC1 social grade. This lowers the potential target audience to 9,367,120 individuals

in the UK. Furthermore as described earlier the campaign focuses on targeting the

‘digital trendies’. Digital Trendies in Britain are an online-savvy group: 80% of them

use the internet more than once a day, compared to 53% of the entire population.

Close to 40% spend at least 20 hours online a week, which is almost double the

proportion for the total British population. Whilst browsing online, they are

significantly more likely than the average British adult to download paid for films, TV

series and software, leave comments on blogs and read and write Twitter feeds.

They are over twice as likely as the average British adult to say they could not live

without the internet on their mobile phone (46% vs. 21%), suggesting they keep up-

to-date when on the go. They are also 129% more likely than the average British

adult to say celebrities influence their purchase decisions. So not only are they

influenced by what others say, they actively create content online meaning there is

great potential in this group to spread a brand message virally and reach fellow

influencers. Being able to plan marketing and media activity at both a local and

international level with a single data currency, rather than switching between data

sources, is key to brands gaining a competitive edge.(Kantar Worldpannel, 2013)

This offers HTC the potential to reach a global audience with the fraction of the cost

it would normally cost. Compared to other European countries Great Britain has the

largest proportion of digital trendies with the 25% of the population being tech savvy.

Moreover in the 16-34 age groups the same report states that 70% of ABC1s are

considered digital trendies. Therefore the target audience this IMC is 6,600,000

individuals in the UK.

8.1 Geo-demographic classification (ACORN)

Acorn is a segmentation tool which categorises the UK’s population into

demographic types; it segments households, postcodes and neighbourhoods into 6

categories, 18 groups and 62 types. (Caci, 2012) Using ACORN segmentation the

target groups can be divided as follows. The target audience relevant for this

campaign is summarized in table 4 below.

Table 4: Geo-demographic classification (ACORN)

D - City Sophisticates Type 15: Younger professionals in smaller flats

Type 16: Metropolitan professionals

Type 17: Socialising young renters

E - Career Climbers Type 18: Career driven young families

Type 20: Mixed metropolitan areas

J - Starting Out Type 33: Smaller houses and starter homes

K- Student Life Type 34: Student flats and halls of residence

Type 35: Term-time terraces

Type 36: Educated young people in flats and tenements

Source: ACORN, The consumer classification, 2013

Those in the category D can broadly be described as affluent younger people who

generally own flats in major towns and cities. Ownership of iPhones, iPads and other

smartphone and tablet devices is double the national average. Generally these

people access the internet quite frequently, to keep up with current affairs, shop,

download music or films, to watch TV channels and the like. These people enjoy the

lifestyle that comes with living in larger cities where there are lots of people and

opportunities to socialise & spend.

E category people are confident users of new technology and frequent users of the

internet. Ownership of smartphones, media players, tablet PC’s and games consoles

are likely to be above average. They use the web to research purchases, read

newspapers, buy and download music. They prefer marketing communications by

email and dislike commercial contact on their phones, which are for social use.

People in category J are the so called internet generation and they spend more time

online than average. New technology including smartphones and tablet computers

might be popular. These younger people might expect to develop their careers

further in the future. They have money but might also have higher outgoings with

their mortgage and an active social life.

Lastly category K people were identified as appropriate for the HTC campaign and

are individuals with a well above average ownership of smartphones, tablets and

hand-held computers as will the proportion of owning portable media players and

games consoles. They will find time for going out as well as going online. Their

interests may focus around social and leisure activities. In addition to the broadsheet

newspapers, film, computing, educational and style magazines may be their

preferred reading matter. (ACORN Profiles, 2013)

8.2 Values/Attitudes & Lifestyle segmentation framework Figure 4: VALS Framework

VALS divides the segmentation into eight

groups determined by psychological

characteristics and resources, which of

these includes factors such as income,

education, energy level and eagerness to

buy (Solomon, 2010) As shown in the

diagram, groups are arranged

horizontally by the primary motivation of

individual and vertically arranged by

resources.

Source: VALS Framework (Solomon, 2010)

Table 5: Primary Motivation of VALS types

Experiencers Experiencers are motivated by self-expression. As young,

Enthusiastic and impulsive consumers, Experiencers

quickly become enthusiastic about new possibilities but

are equally quick to cool. They seek variety and

excitement, savouring the new, the offbeat, and the risky.

Their energy finds an outlet in exercise, sports, outdoor

recreation, and social activities. Experiencers are avid

consumers and spend a comparatively high proportion of

their income on fashion, entertainment, and socializing.

Their purchases reflect the emphasis they place on

looking good and having "cool" stuff

Achievers Achievers are active in the consumer marketplace with

many wants and needs. Image is important to Achievers;

they favour established, prestige products and services

that demonstrate success to their peers. Because of their

busy lives, they are often interested in a variety of time-

saving devices.

Thinkers Thinkers have a moderate respect for the status quo

institutions of authority and social decorum, but are open

to consider new ideas. Although their incomes allow them

many choices, Thinkers are conservative, practical

consumers; they look for durability, functionality, and value

in the products they buy. They tend to be well educated

and actively seek out information in the decision-making

process.

8.3 Sample Consumer Profiles

Sam, 18

Sam just finished high school and is looking for universities to

pursue a career in architecture. He is a very social person and

a very active individual. Throughout his years in school he has

always been active in sports like basketball and football. He

has a very large social group with who he keeps in regular

contact. Sam also likes to draw and is also fascinated by

music. He composes music through his computer in an

amateur level which he puts on the internet through various

social media. Sam is also into rock and alternative music. He

loves discovering new bands and artists and always invites his

friends to go and watch them together. He has very big

influence on his friends and is admired by them. One of his

fascinations is gadgets as well. When he goes out he likes to

take pictures of buildings that he likes and street art that he

finds appealing and puts it on his blog where he writes

regularly.

Maria, 24

Maria is a graphic designer in and advertising agency. She is

very artistic and she despises mainstream culture. She does

not have many friends but she loves the few she has and is

very close to them. On her free time she loves reading books

and drawing. Maria shares her art on flickr, an online picture

sharing platform geared towards artists and photographers.

She has an expensive camera which she uses regularly but

she uses her phone to snap photos on the go. She also loves

listening to classic rock, jazz and blues when she is

commuting. Maria seeks inspiration on everything around her

and loves taking notes on her phone when she has an idea

about her new project.

John, 32

John is a successful web designer, after working in a

multinational company for 5 years he opened his own business

and he now employs 20 more people. John is still single

because his busy life didn’t allow him to make a family until

now. John has a passion about gadgets and he likes to talk

about everything new on the market with his friends. He loves

Android devices as a developer he likes that it is open source

and he is also a member of the xda community of android

developers. He rarely uses his smartphone to make phone

calls and even when he does he uses VoIP services like Skype

to do so. He loves technology but most of all he loves giving

advice to about technology to his friends. He also loves music

and traveling so staying connected is crucial to him and his

business.

8.4 Means End Chain

The means end chain model explores the connection between consumer and

product through the construction of a simple associative network between concrete

and abstract product attributes, functional and psychosocial consequences linked

with product use and, finally, consumers’ instrumental and terminal values. Product

attributes are but means through which consumers achieve their ultimate values,

ends, via the positive consequences or benefits accruing from the attributes. In other

words, goods/services are seen as means to satisfy needs that are conscious to a

varying degree. In the means-end chain model, products are thus not chosen and

purchased for themselves or their characteristics, but rather for the meaning they

engender in the mind of prospects (Reynolds and Gutman, 1988). A means-end

chain is thus a conceptual structure linking a product and a consumer.

Table 6: HTC One Means End Chain.

Concrete Attributes

Abstract Attributes

Functional Concequene

s

Psychosociall

Concequences

Instrumental Values

Terminal Value

Concrete Attributes Screen Size: 4.7 inches diagonal Weight: 0,32 pounds Slim phone. Fat sound. With dual frontal stereo speakers and powerful amplifiers. Comes in many colours and has an aluminium body. The price of the device is £450 unlocked.

Abstract Attributes An innovative full aluminium built body with loud front facing speakers and a clear screen for maximum media enjoyment.

Functional Consequences

A full package that has everything and more than a typical smartphone, helps me stay in touch with my friends, take photos, watch movies, play games, read books and listen to music among other activities.

Psychosocial Consequences

A phone that makes me feel unique. It draws attention because of its unique design, the beautiful screen and loud and clear speakers. I believe it reflects my unique personality and my creative nature.

Instrumental Values Makes me feel different from the masses who own Samsung and Apple devices. Makes me feel like I am different and unique.

Terminal Value It cannot be said that HTC One or any other phone can lead to a terminal value.

Figure 5: Means End Chain, Solomon, M.R, 2010

9. Branding issues of HTC

9.1 Brand Wheel of HTC One

Before developing and creating the appropriate message for the HTC One, a brand

wheel is built. A brand wheel assists in determining qualities and uniqueness of a

brand/product and identifying underlying goals of a campaign, as figure 5 below

shows (Percy, 2012).

Figure 5: Brand Wheel for HTC One

Atributes

•Innovative brand

•Android HTC Sense 5 software

•Touchscreen/ 4.7 inch display

•Call/ text people

•Eco-friendly (material recyclable)

•Ultrapixel camera shutter lens – optically stabilized camera

•Beats sound enhancement

•NFC tech, wireless charging

•Durable alluminium case

•super-fast connection

•Colourful stylish design

Benefits

•Innovative smartphone

•Exclusive applications

•HD touchscreen

•Contact people

•Adroid – Open source environment

•High quality photos

•Long battery life

•Environmentally friendly material

•Stylish design

•Best sound quality on a phone

Values

•Makes one feel innovative

•Makes one feel playful and creative

•Makes one feel unique (makes one feel not mainstream)

•Feeling like part of a community of creators and innovators

Personality

•Creative personality

•Is tech savvy

•Appreciates great design

•Like to participate in social events

•Go out regularly and have a large social group

•Likes to share on social media aspects of his everyday life

•Creates art whether it is music, writing, filmmaking

BRAND ESSENCE

Affordable Innovation

If the HTC One was a person, it would be innovative, unique, modern, stylish, busy,

organised, active and interested in photography, fashion, music, blogging, art and

movies.

Considering the variety of attributes, benefits, values and the personality designed

for HTC One, the brand essence was defined as "affordable innovation”

This is be used in forthcoming campaigns and will define the brands activities for

current and future marketing communications without undermining the brands value

and make it being perceived as ‘cheap’. Furthermore it is worth mentioning that the

‘affordable innovation’ brand essence is majorly different than the current positioning

of the brand. Currently the brand positions itself as a premium innovative

smartphone. However based on the research and critical evaluation of the author it is

necessary for HTC to change its positioning and its communications in order to

effectively compete in the marketplace.

9.2 Keller’s Brand Equity Model

For HTC One to be re-considered a strong and viable brand in the smartphone

marketplace various models and in depth secondary research was conducted.

Keller’s brand equity model helps asses the perception and impression of consumers

about the brand. The model has four stages of branding which consist of judgment,

feeling, performance, image and salience. Equity is the sum of values the consumers

associate with the brand. (Keller, 2008)

Figure 6: Keller’s Brand Equity Model

Stage 1 – Brand identity: The first step aims to create brand awareness and

identity. It is also important to ensure that brand perceptions are correct at key

stages of the buying process. In terms of awareness HTC as a brand is much lower

than its competitors. Even though the launch of HTC One was supported by various

media in the UK the marketing spend was not sufficient. Robert Downey Junior has

been recruited by the brand to be an ambassador who has assisted to boost

awareness but as discussed in the report HTC’s issues go down to the roots of the

company. The ‘Here’s to Change’ campaign has generated a lot of awareness about

the actor and on Youtube it has over 2 million views but the 2 minute clip barely

shows the product and the average consumer do not know that the ads are for HTC.

HTC has also been successful in promoting the HTC One in all the major telecom

providers in the UK. HTC’s positioning in the market is on the premium segment.

It is clear that adjustments need to be made in the communications of the brand in

order to effectively reach the target audience.

Stage 2 – Brand Meaning: The goal in step two is to identify and communicate what

the HTC brand means, and what it stands for. The two building blocks in this step

are: "performance" and "imagery’’ "Performance" defines how well the product meets

your customers' needs. “Imagery" refers to how well the brand meets your

customers' needs on a social and psychological level.

Brand Performance Brand Imagery

HTC One launched on late April 2013

and won multiple ‘best phone’ awards.

The device is revolutionary both inside

and out with specifications that are top

notch and hardware that is miles ahead

of its competition. Therefore on a

functional lever HTC One is on par if not

ahead of its competition.

HTC’s image however does not reflect on

its communications. It projects itself as a

modern, innovative brand. The

perception of the consumers however is

far from what communicates and there is

a large gap between what the brand

communicates and what the consumers

think of the brand.

Stage 3: Brand Response: This stage refers to how consumers respond to the

brand/product when they get into contact with it through the various channels.

According to the model, there are six positive brand feelings: warmth, fun,

excitement, security, social approval, and self-respect. Customers' responses to the

brand fall into two categories: "judgments" and "feelings." These are the two building

blocks in this step.

Judgments Feelings

When consumers come in contact with

HTC One the response is wonderful.

They think that the build quality

surpasses all other brands in the market

and it has a beautiful large screen that

the Apple iPhone doesn’t offer. It also

provides innovative features that cannot

be found on any other smartphone in the

market like the HQ sound and amazing

camera.

Currently the feelings of the consumers

towards HTC are insecure. There is a lot

of publicity on the downfall of the brand

and the loss of revenue and market

share. Consumers don’t want to invest in

such a brand. The desired response after

the campaign is totally different.

Consumers will feel exited to own the

HTC One. Apart from the perceived

value for money consumers will feel part

of a community where creative ideas are

encouraged and uniqueness is admired.

Stage 4: Brand Resonance: Brand "resonance" sits at the top of the brand equity

pyramid because it's the most difficult – and the most desirable – level to reach. The

brand achieves resonance when customers feel a deep, psychological bond with

your brand. This can be said about the competitors of HTC, Samsung and Apple

who have very loyal and enthusiastic customers. However HTC due to issues

explained above in the report has lost connection to its customers. Some of the

issues addressed are the slow Android updates and not supporting devices long

term. The campaign aims to address those issues with the various media channels

and establish a connection with the consumers through the communicated message

and various media channels.

10. COMMUNICATIONS AND CAMPAIGN STRATEGY

10.1 Campaign Message

The campaign will focus on market penetration with a focus strategy to attract

customers who are either first time smartphone buyers or price sensitive consumers

who would otherwise buy a low end smartphone. To reach these customers an

investigation or the opportunities and trends was conducted to identify the

appropriate target audience. The campaign message will communicate the values of

HTC which are innovation, uniqueness, creativity and fun through an integrated

marketing communications campaign which will run through various media. As

mentioned before, the campaign aims to re-position HTC in the mid end market

distancing itself from its primary competitors which are Apple and Samsung. The

budget allocated for this six month campaign is £6 million which will be spent on

various media for the most effective and efficient reach of the target audience and

other stakeholders. The campaign will give HTC One and HTC as a brand high

exposure to its target audience through careful targeting.

10.2 Brand Image

To position HTC in the mid-end market without undermining the perceived value of

the brand push and pull strategies will be used. As David Ogilvy put it ‘Clients get the

advertising they deserve’ and for HTC this hasn’t been the case. It is a brand with

excellent products but struggling to connect with its audience and find a sustainable

positioning in the market.

The core of the campaign will be based on experiential marketing activities which

will communicate the fun, creative, artistic and innovative aspect of the HTC brand.

These activities will be supported and communicated via other media channels such

as public relations, out of home, print and online. Furthermore the already

established sponsorships with UEFA and MOBO awards will be utilised to suit the

needs of the campaign. For the tech savvy, artistic and creative target audience

reference groups are an important channel of influence. They are influenced by

others opinions in their group and like to share and experience new things.

Reference groups in this particular market carry a large referent and social power.

This means that the actions of others can be altered and influenced at a large part

from people which the target market admires and aspires to. To reach these

influencers the campaign will use the experiential activities and public relations to put

custom made HTC ones on their hands.

10.3 Campaign Strap Line

To communicate the values and to reflect the new direction of HTC a new strapline

was developed which was chosen after a poll on a social platform called reditt where

individuals reflecting the target audience profile were asked to vote between six

different new slogans for HTC. More than 100 individuals participated and after

careful consideration and taking into account the votes the new strapline was

developed. Currently HTC is using the ‘Here’s to change’ strapline which does not

reflect what the brand is about effectively and this has been proven by the financial

results of the last quarters. The new strapline which will tie everything together is:

‘EXPRESS YOURSELF’

10.4 Positioning statement of HTC

In accordance with the analysis of the macro and micro environment of HTC as well

as the established strategic directions the following positioning statement was

formed:

HTC provides young creative individuals who want to express themselves and create

art in any form or shape an innovative device masterfully crafted with metal which

also offers many features designed to enhance creativity and make life easy for the

user.

10.4 Message Delivery Tools

Based on the research and the set objectives the communications tools that will

deliver the message to the appropriate target audience need to be determined.

Choosing the appropriate media channel and communications tool is essential for

the success of the campaign. Push and Pull strategies require different tactics and

tools in order to achieve the desired results. According to the objectives deriving

from the hierarchy of effects model the campaign aims to create awareness, engage

and interact with consumers, create preference and liking for the HTC brand and

lastly generate 60000 new sales of the HTC One flagship smartphone.

The table below breaks down the tools used on the campaign and links it to the

objectives set for the campaign.

MEDIA OBJECTIVE AND TASK

Experiential -Generate awareness, engage target audience with the brand and create buzz, interest and preference. -Comprehension- Knowledge and understanding of HTC’s values and message.

Public Relations -Create awareness among reference groups, generate free coverage and publicity on media -Create awareness about the repositioning of HTC in the mid end market and inform media about the 80£ price cut in the SRP of the HTC One -Generate earned media space for the campaign.

Out Of Home -Create awareness about the experiential marketing activities reaching the end consumer and driving to the channels online.

Print -Create awareness and reach consumers through targeted print outlets -Encourage action and trial through driving to web.

Online -Engage and inform consumers about the various activities which will occur in the six months of the campaign through owned and paid for media

TV- Advertising -Create awareness and call to action the target audience.

Sales Promotion

-Point of sale posters in retail distribution channels informing shoppers about the price drop of HTC One

Reference Groups

-Through custom made HTC Ones influencers will be incentivised to switch to HTC One. The targeted influencers will be from the fashion, music and art world and will also participate in HTC’s activities.

In any marketing communications campaigns it is necessary to implement both push

and pull strategies because the combination of them ‘provides greater synergetic

effect than can be achieved in the use of either strategy singly’ (Pickton D., Broderick

A., 2005, p. 432).

10.5 Push Strategy

10.5.1 Internal Marketing

It is important for this IMC that all parts of the campaign work flawlessly together.

HTC has been criticized and received a lot of bad publicity about its employees

making a show when leaving the company and with unsatisfied employees being

unsure about their future. Therefore it is crucial that an internal communications plan

is implemented to keep everything together, educate all the employees and make

them feel as part of the company, transfer the vision to them and inform them about

the activities and how to coordinate everything. For the campaign a new website will

be built which will require a strong and knowledgeable team to operate. One of the

main purposes of internal communications is to emphasize the strategic importance

of the new strategic direction of HTC and the aim of re-positioning in the mid end

market. Consequently, before the campaign is launched a series of briefings will take

place. The employees will be informed of the IMC objectives that HTC seeks to

achieve by launching the new service, as well as individual responsibilities. It is

important that the information is presented in an appropriate way in terms that

everyone will understand.

10.5.2 Point of Sale Marketing

Point of Sale marketing communications activities that take place in the retail shops

where HTC One can be found, those include Carphone Warehouse, Phones4u and

all major telecom providers in the UK retail shops. It is an important aspect within

marketing communications mix because point of sale is the area where many

decisions are made. Therefore, it is necessary to use this opportunity to influence the

customer’s decision-making process. The PoS activities will showcase posters in the

window of the retail shops which will be of the same creative style as the rest of the

marketing communication tools. The difference is going to be that there is going to

be focus on the lower price along with the new strapline ‘Express yourself’

10.6 Pull Strategies

10.6.1 Experiential - Events

As a unique approach to the task of marketing goods and services, experiential

marketing is a concept that integrates elements of emotions, logic, and general

thought processes to connect with the consumer. The goal of experiential marketing

is to establish the connection in such a way that the consumer responds to a product

offering based on both emotional and rational response levels. Ads on the Internet, in

print media, and on billboards must immediately catch the attention of prospective

customers and hold that attention long enough to make an impact. Experiential

marketing holds the key to making this happen. By appealing to all the senses, and

making the connection quickly and seamlessly, this approach to the marketing task

ensures that businesses can still attract and satisfy the needs and desires of

consumers.

10.6.2 Reference Groups

Reference groups are groups that consumers compare themselves to or associate

with. Reference groups are similar to opinion leaders in that they can have a

profound influence on consumer behaviour. Reference groups are considered a

social influence in consumer purchasing. They are often groups that consumers will

look to make purchasing decisions. So if a reference group endorses a product,

either through use or statements about the product, those that look to the group will

often purchase that product. On the other hand, if a reference group disapproves of

a product, those that associate with that group will probably not purchase the

product. As described in the market analysis part of the report, reference groups are

a very important purchase decision influencer in the smartphone market. As soon as

a phone is released in the market, blogs, YouTube and tech websites are flooded

with reviews and as the Kantar report and the target audience characteristics

suggest these reviews are one of the major channels of information gathering.

Furthermore target audience profiling suggests that opinion leaders and celebrities

are a major influences in their purchase decision.

Public relations, Online, Print and Out of Home media are used to generate

awareness and ‘buzz’ among the target audience about the campaign and the

activities and events which will run throughout the whole campaign.

11. IMC DELIVERY

The proposed IMC campaign will last for six months, from the beginning of

December 2013 till the end of May 2014. The campaign will focus on creating

engagement with the target audience in the form of events which will be themed

around music, fashion or arts. These events will be supported by promotional tools

such as PR, print advertising, online, out of home and opinion leaders (influencers)

that aim to generate awareness and drive to web where consumers will be able to

sign up and participate in the events. The campaign with the strapline ‘Express

yourself’ aims to communicate the message that HTC One is about YOU and it is

there to let you express your creativity and sharing it with the world easier. The

campaign is consumer centric and although it implies the benefits of the design of

the HTC One it does not focus on those. Instead the message aims to position HTC

as the go to brand for individuals who want to be different, do not follow mainstream

culture and are artistic in some way whether that is creating music, fashion, art or

any other creative activity.

A new mini website will be built for the purposes of the campaign. The website will

have a social aspect where individuals can share their profile on the HTC website

across all popular social media. The purpose of the website is to complement the

events which will take place in popular locations in London. TV advertising will be

used in order to reach a wider audience in the early stages of the campaign through

the talent show X-Factor.

The events will attract artistic individuals of the target audience who have an interest

in music, fashion and filmmaking. They should not have a contract with a publisher,

label etc and be 16-34 in order to be eligible to participate. The events will be held in

central location venues such as Proud Camden, Fabric, KOKO and Pasha. The

artists will upload their work in the categories Music, Fashion and Film on the mini

website where everyone can vote and make them the winners of one of the large

prices. The Music category will have the opportunity to play on Fabric on the side of

Cyril Hahn one of the most famous and top Djs in London. Fashion category winner

will have the opportunity to present their work on the London Fashion Show 2014

while the filmmaker category winner will be entered in the BFI Film Festival and will

have the opportunity to work on the HTC One2 TV ad while the fashion category

winner will also have the chance to create a limited edition design for the HTC One2.

As an added incentive, apart from the major exposure the artists will gain they will

also win prizes. The first place of each category will win £30,000 the second £5,000

while the third will win the gold version of the HTC One flagship. To conclude the

campaign a large event will be held at London Eye. The popular tourist attraction will

be lighted in HTC’s characteristic light green colour and each capsule of the London

eye will be transformed into a mini club to celebrate the winners as well as to launch

the new HTC One2. All the activities will be streamed live through the YouTube

channel of HTC and shared through all social media platforms of HTC. This will

create a lot of free publicity and generate a lot of buzz through all media channels

and attract our target audience.

To initiate the campaign and throughout the six months print media, OOH and Online

will be used to generate awareness about the events. The campaign will also be

supported by Public Relations which will communicate the repositioning of HTC in

the mid end market as well as the campaign and the event.

Figure 7: Custom made HTC Ones to be given to winners and influencers

11.1 Campaign Flow

11.2 STAGE 1

11.2.1 Advertising

Television’s effectiveness (sales uplift per exposure) has remained constant even

through the last recession; it continues to deliver more profit than any other

advertising investment (Thinkbox, 2013). Firstly an ITV spot has been chosen, the

UK’s largest commercial TV station that reaches over 8.5 million ABC1’s each week,

with a high percentage of 16-34 year olds viewing its programs on a daily basis (ITV

plc, 2013). The channels of ITV on which the advertisements will be broadcasted are

ITV1, with a high percentage of ABC1 adults and Channel 4 being more popular

among ABC1 males, offer the perfect opportunity to reach a large segment of the

target audience. On both channels 30” advertisements will appear on prime times for

a four week period which will be broken down in different times to maximize reach.

To kick start the campaign and generate awareness among the target audience 20

30 second spots will be used in one of the most viewed talent show in the UK. X-

Factor is one of the most viewed shows in the UK and the viewership among the

STAGE 1

•TV

•PRINT

•OOH

•POS

•PR

•WEBSITE

STAGE 2

• EVENTS

• PR

• ONLINE

STAGE 3

• Campaign Evaluation

• Event for HTC One2 lanch

target audience is. Furthermore ten 30 second spots will be bought on Chanel 4

during the Homeland series, a popular drama with high percentage of viewership

among the target audience. To generate awareness about the campaign and to

gather participants for the events it is essential to reach a wide target audience cost

efficiently and effectively. The events will begin one month in the campaign therefore

it is essential to create as much engagement as possible with the target audience.

Table 7: Channels and frequency of TV ads

11.2.2 Print

The campaign will also be featured throughout both print and digital magazines. The

final selections were made considering the latest figures of readership and target

audience from Mediatel. All the magazines included have diverse content and appeal

to the target audience. The HTC One advertisements will appear in two issues of the

Stuff magazine featuring two full page ads, one on the first half of the magazine and

the second on the inside front cover of the magazine. The magazine has a

readership of 239,000 with 61% being 16-34 of which more than 75% are ABC1’s.

Furthermore to reach the female target market and fashion enthusiasts of ABC1’s

the HTC One advertisement will be placed in two issues of the popular magazine

ELLE with inside cover page advertisements. Elle has a readership of more than

900,000 of which 61% are 16-34 ABC1s. (Mediatel, 2013).

11.2.3 Out Of Home

Additionally 48 sheet advertisements will be placed in the busiest stations across the

London underground for a 3-week period at the beginning of the campaign. The

average dwell time on an underground platform is 3 minutes and with more than

150.000 people, 74% of which are of the ABC1 social profile, entering the

underground every hour the reach potential is high. Furthermore the advertisements

will appear on buses for a total 8 weeks. With 30 million people viewing bus

Channel Program Weeks Cost per week Total Cost

ITV1 X-Factor 6 £156,000 £940,000

Channel 4 Homeland 4 £36,000 £144.000

ITV4 Morning-Evening 5 £170,000 £850,000

advertising every week across the UK and 5.2 billion journeys annually, half of which

are made in London, bus advertising offers a great opportunity for high reach and

exposure at a relatively low cost. Mega rear packs were chosen (full back of the bus

ads) with 50 sites in London and 50 in other major cities in the UK (CBS Outdoor,

2013).

11.2.4 Public Relations

Prior to the campaign press releases will be sent to print and online media. The

targeted media will be from special interest to consumer oriented. Special interest

will include PR News, Campaign and Marketing Magazine among others. The

reason is to inform stakeholders about the new campaign and to inform them about

the upcoming activities. It will also inform them about the new strategic direction and

the repositioning of HTC in the mid end market. Furthermore consumer media will be

targeted to generate awareness about the sales promotion of HTC One and to reach

the end consumers along with point of sale posters and informed salesmen.

11.3 Stage 2

11.3.1 Events

As mentioned before, the events will be put into action one month into the campaign.

This will allow time to attract contestants for the events and attract the target

audience to engage and participate in the events. Each stage of the events will focus

on one artistic aspect and is going to last one month. The first month is going to

focus on music, before the second part of fashion there is going to be a one week

break and the same goes for the filmmaker month. Through the website which will be

made specifically for the event consumers will be able to vote for their favourite acts

and win tickets for the venues where the events will be held.

11.3.2 Online

The events will be broadcasted live through Youtube via HTCs channel which has

280,000 subscribers and will be promoted through targeted Youtube ads in order to

reach a wider audience. All owned media channels will be utilised to drive

consumers to the website where they can vote and interact with the campaign.

Instead of just being told the message consumers can interact with the campaign,

vote and pick their favourites and support them till the end of the campaign.

Ads on social media will be used to promote the campaign, create awareness and

drive traffic on the website.

12. Campaign Schedule The campaign will begin with a burst in order to create awareness and generate

interest for the events. The second phase is going to be lower on ad spend due to

lack of TV while phase three is after the events with the final event to launch the new

HTC One2.

Strategy: Burst followed by Pulse

`*

12.1 MEDIA TIMELINE

Media December January February May April May

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

TV ITV1

CHANNEL 4

ITV4

MAGAZINES STUFF

ELLE

OOH UNDERGROUND

BUSES

PR EVENTS

PRESS RELEASES

ONLINE SOCIAL NET/S

LIVE STREAMING

POS S.P* RETAIL SHOPS

13. BUDGET

MEDIA QUANTITY ESTIMATED COST PER UNIT SUBTOTAL

TV ITV 4 Weeks £47,000 per 30’ X-Factor £940,000

ITV 4 5 Weeks £16,000 £850,000

CHANNEL 4 4 Weeks £14,400 £144,000

SKYTV (A34 16-34) 5 weeks £7,800 £245,000

PRESS STUFF 2 Issue I Full page ad £53,000 £106,000

ELLE 1 Issue I Full page ad £25,000 £25,000

Time Out 3 Issues I Full Page £11,000 £33,000

PR NATIONAL MEDIA 6 Press releases £300 £1,800

EVENTS 4 Events £200,000+400,000 (London Eye HTC One2 launch)

£1,000,000

OOH UNDERGROUND 10 Sites central stations £25,400 £254,000

BUSES 25 sites central London £20,500 £512,500

ONLINE HTC CUSTOM WEBSITE - - £9,000

FACEBOOK SET BUDGET £15,000 £15,000

TWITTER SET BUDGET £6,500 £6,500

YOUTUBE LIVE STREAM - - -

SPOKESPERSON INFLUENCERS 3 £50,000 £150,000

POS 3-VOD-EE-CARPHONEW- 1400 Shops in the UK £40 £56,000

SALES PROMOTION

Unit Discount 60,000 (target sales) - £930,000

TESTING PRE-TEST AND EVALUATION

- - £65,000

TOTAL £5,986,300

`*

14. CAMPAIGN EVALUATION

Throughout the duration of the campaign planning and implementation, it is strongly

recommended that HTC constantly evaluate their actions. Evaluation techniques are

employed in order to assess the effectiveness of the communicated messages and

to determine if the established objectives are achieved, as well as to see any direct

development. For the HTC campaign, the following three aspects are considered

important points to keep track of.

14.1 Campaign ROI

The expected revenue of the campaign is £31 million for the 6 months December to

March. The expected revenue derives from the estimated sales of HTC One

smartphones which is 60,000 new devices. This assumes that all devices are sold

unlocked without a contract with the full price of £350. However there is a 60% - 40%

analogy of devices sold on contract and devices sold unlocked according to HTCs

own data. Therefore expected revenue from the unlocked devices will be

£350*24000 = £8,400,000. The expected revenue from carriers is £290*36,000 =

£10,440,000. This makes the total revenue of the campaign £18,840,000. The total

budget spent for the six month campaign is £5,986,300. This brings the expected

ROI for the campaign to 1:3.2. This means that for every pound spent on the

campaign £3.2 will be returned.

14.2 Pre-Test

The first stage consists of the Pre-Testing, which takes place during the copy

development stage when the initial ideas of the campaign are tested. The evaluation

assists in finding out about the situation prior to the campaign implementation and

explores consumers’ reactions to the planned advertisement (Percy, 2012). The Pre-

testing helps to identify if the creative idea meets the set objectives, if the

communicated message is consistent or if there is any unclear parts in the creative.

14.3 Continuous Testing

In the second stage, a continuous brand tracking of HTC is recommended. This

testing takes place in the final production stage and evaluates the complete

advertisements that are distributed to the consumer. This evaluation step aims to

determine the attitudes and the perception towards HTC. Furthermore it needs to be

identified if the communicated message has created a successful breakthrough to

the audience. Even though continuous tracking has to be seen as a rather expensive

tool, it is definitely recommended to HTC, as it makes essential before-after

comparisons. For HTC it is recommended to hire research agency YouGov, which

offers a branding tracking service and releases a daily measurement of a brands

perception among public. As the generated data is updated so frequently, HTC can

immediately react on any changes recognised as necessary. This includes factors

such as customer satisfaction, quality, reputation or the attention for instance (Miller,

YouGov, 2012).

14.4 Post-Test

The third and last suggested evaluation stage for HTC is the post-testing. In this

case, the actual performance of the campaign can be tested, after the advertisement

has been run in the various media channels (Percy, 2012). A comparison can be

made, if the achievements reached the set objectives. This includes the evaluation of

figures such as the market share and the sales share, if they have increased and

reached the defined goals. Using the findings from YouGov’s continuous tracking, it

can be determined if the campaign has improved the perception and attitude of the

brand overall.

15. Vertical Integration

Companies need to have both horizontally and vertically integrated marketing

campaigns for the best results. Horizontal strategic integration encompasses all the

marketing efforts across the board. It is very important for HTC to have integrated

efforts in its marketing campaign to ensure the best results. This campaign aims to

call to action, drive to HTC’s website and engage with the consumer like never

before. This IMC aims to leverage the power of cross-media effectively and

efficiently in order to achieve the set objectives in the best way possible. It is

important that the message carries across all the channels used from TV to out of

home to print in order to maximize the results and minimize confusion among the

target audience. This campaign communicates the corporate mission of HTC down

to the marketing objectives. HTC’s vision is to be one of the most innovative brands

in the smartphone market and offer a high quality personalised experience to the

consumer. This was translated in a business objective to re-position HTC in the mid-

end market while at the same time connecting with the target audience and adding

value to their HTC smartphone. This is why the marketing objective is to engage and

interact with the consumers like no other brand in this market does in order to

effectively communicate the core values of HTC to the consumers and connect with

them.

15.1 Horizontal Integration

This IMC campaign puts the Strategy, Message, Tactics, and Actions in alignment

with HTC’s vision and purpose in the market. All the tools in the promotional mix

each provide unique benefits to the campaign and contribute in achieving the goals.

All tools have both positive and negative features and contribute differently to the

campaign. This is why it is necessary to evaluate and analyse all tools. HTC’s

repositioning campaign aims to communicate the message to multiple stakeholders

and completely changes the strategic direction of the company. This is why

delivering the right message to the right people is crucial. Testing and evaluating all

the stages of the campaign is also very important in order to see if the objectives are

met and the message is comprehended.

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