NIIT University

Electronic Media and Marketing Environment

The Electronic Media and the Marketing Environment
Course Instructor Date of Submission Dr Anurag Dugar 9th May 2011

Ashish Kumar Rahul Prakash Group 8 MBA (Finance & Banking)

Ashish Kumar & Rahul Prakash

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The primary electronic media sources familiar to us are better known as video recordings. and TV broadcasts. radio. multimedia presentations. However. This is in contrast to static media (mainly print media).g. desktop computer. Ashish Kumar & Rahul Prakash 2 . which today are most often created electronically. audio recordings. usually for price. television. electronic media may be in either analog or digital format. but don't require electronics to be accessed by the enduser in the printed form.1 Evolution of electronic media market “Evolution of entertainment media” In the last century. Any equipment used in the electronic communication process (e. Evolution of the electronic media and recent development 2. handheld device) may also be considered electronic media.NIIT University Electronic Media and Marketing Environment 1 Introduction Electronic media are media that use electronics or electromechanical energy for the enduser (audience) to access the content. The electronic media market is unusual because until early in the twentieth century it was dreamt that people with read newspaper or can communicate being far separated. mainly due to technology and increasing globalization. mean that we now have an electronic media marketplace open to everyone. slide presentations. A market is a place for buying and selling. The first transatlantic two-way radio broadcast occurred in 1906 and led to common communication via analogue and digital media: Analog telecommunications include traditional telephony. radio. As will be seen. CD- ROM and online content. a revolution in telecommunications has greatly altered communication by providing new media for long distance communication. 2. great changes. telephone. game console. for exchanging goods and services. Most new media are in the form of digital media.

NIIT University Electronic Media and Marketing Environment Digital telecommunications allow for computer-mediated communication. Internet forums. magazines. high speed data processing capabilities. On the other hand. Mobile handsets market has seen an exponential growth since its first commercial launch in 1983. cinema. is estimated to reach 50 million in 2011. for the first time. focusing on their growth strategies and other developments such as geographic expansion and the development of patented technologies.3 The smart phone market: size and structure According to Deloitte forecast. sales of personal computers will represent less than half of total computing device market. This report will identify the key players in each application market. and teleportation). Combined sales of desktops. including lower production cost. As technology. Ashish Kumar & Rahul Prakash 3 . coupled with strong growth of smartphone sales means in 2011. smartphone sales will reach 375 million devices in 2011. improved handset design and functionalities. tablet. Modern communication media now allow for intense long-distance exchanges between larger numbers of people (many-to-many communication via e-mail. The smartphone market is currently witnessing high growth due to a host of factors. laptops and netbooks would be 390 million devices. Thus. The surge of tablet market. the expansion of global mobile email and browsing services. 2. the rising competition among mobile carriers. telegraphy. and inbuilt GPS capabilities. multimedia functionality. 2. the electronic media market is getting evolved. Earlier people used to send postal mail for distant communication but due to technological advancement the same can be sent using email. many traditional broadcast media and mass media favor one-to-many communication (television. we will be focusing on smart phone segment for analysis in this article. Another mobile device. radio. newspaper.2 billion. There were 12 million global mobile phone subscribers in 1990 and by the end of 2010. PDAs and laptops. the growth had slowed a bit between 2006 and 2009 on the account of economic slowdown and lack of strong telecommunication infrastructure in emerging countries. Smartphones are fast becoming a viable alternative to feature phones. the emergence of 3G and 4G network technologies. offering phone features such as voice and SMS coupled with mobile internet applications. and also facebook). the number of mobile phone subscribers reached 5. However. and the standardization and upgrades of operating systems. situation and public awareness is changing.2 Recent development in electronic media market We all know that electronic media market is very vast and comprises of different media. and computer networks. it said.

Ashish Kumar & Rahul Prakash 4 . The smartphone market is growing but many analysts feel the market structure cannot be sustained. as almost one in every five of all handsets shipped in the second quarter of 2010 was a smartphone device. it is thought that the only way the market can be sustained is for “three or four key operating systems” to dominate the market and reduce fragmentation of users. This has been achieved by the continuous enhancements being done on i. Growth is being driven by the emergence of heavily subsidised smartphone pricing which is no longer considered a barrier to smartphone adoption. as shown in Figure below. 3. With so many manufacturers and mobile operating systems competing in the market. The introduction of Windows Phone 7 could further increase smartphone demand or could instead help increase consumer confusion in a market dominated by so many brands. Marketing Environment In today world of cut throat competition Smartphones have undergone a radical transformation over the years. Apple. posting impressive revenues and in some cases smashing sales records.e. to satisfy the customer needs. The marketing environment has a considerable impact on how the Smartphones market gets affected. Some changes occur very slowly while others can affect the market much more quickly.NIIT University Electronic Media and Marketing Environment Research shows that the smartphone market is continuing to boom. some are within a company‟s control and others are way beyond it. instead restrictive data plans are seen as more of an obstacle. HTC and RIM are leading the smartphone charge. change. Some changes are because of influences beyond the control of designers or manufacturers. They have achieved a space where they are able to do almost all the tasks that can be performed by a computer. These changes are all gathered together in what is called the marketing environment. Nokia.

Marketing 8th Edition Management. for instance the hardware designer who has the idea for the style. But with the advent of iPhone the shares of blackberry has taken a beating over the years. They have been able to do so by maintaining Ashish Kumar & Rahul Prakash 5 . Manufacturers The manufacturers have a key role in the growth of a product. If the styling is great then the customers have a liking for the product. Initially blackberry had a considerable market share.e. marketing intermediaries (which help to get the goods from the factory to the consumer) and the consumers themselves. Factors which ideally are within companies‟ control are to a greater or lesser extent their suppliers. 3. The figure below shows the increasing shares of Safari and Andriod over the years. The safari operating system market share have been increasing over the years.. On top of this if the software content is excellent then it is an enviable combination. Adapted from Kotler.1 Micro-marketing environment Suppliers The designers here refer to the hardware designers who come out with the outlook of the Smartphones. For customers the providers of Smartphones may seem to have a variety of sources. First impression has a huge bearing initially. Apple Store. P. (1994).NIIT University Electronic Media and Marketing Environment The marketing environment. Apple has been able to maintain an unprecedented demand for its product such as iPhone. the manufacturer who makes up the equipment or the retailer to whom the consumer goes to buy the garment i. This is where the Apple has been able to attract a huge loyal fan following.

The chips are manufactured by Samsung while the screens are manufactured by Toshiba. They make microchips for the iPhones. The suppliers have also become competitors. Is this the beginning of a coming dramatic shift? The majority (79%) of respondents cite the Smartphone as the phone they used the most to conduct business. This has happened due to a cult following for the apple iPhone. Marketing intermediaries These are the main channels that help to get the goods from the manufacturer to the consumer. Competition Apple incorporation has to now compete against their fast closing on rivals based Android powered phones. But today they have a plethora of Smartphones available in the market to choose from. China offers a cheap hardware production capacity. In fact. Samsung is supplier to Apple. Recently Apple filed a lawsuit pertaining to patent infringements against Samsung. Consumers Earlier when the Smartphone concept was new the customers had very little choices. Now the customer wanted more powerful gadgets in their pockets which led to the development to Smart phones. Ring Central Survey Conducted recently points out that: Smartphones are also encroaching on computers as well. Samsung Galaxy S and the tablet can be talked about. Each company tries to have some USPs for their product. with 34% of respondents using the Smartphone more than the computer for business. The device has been able to retain the customer‟s desire for such a long. Advertising agencies. Their styling is almost similar to iPhone and iPad. Their roles can be many and varied. In this regard. The main ones are:       Retailers. 7% don‟t even take their laptop when they travel for business if they have their Smartphone. Distributors. With coming of 3G and 4G technologies people have been able to watch TVs on them. as compared to an office phone or home phone. Wholesalers.NIIT University Electronic Media and Marketing Environment exclusivity about their offerings in the coming generations of the iPhones. Earlier Blackberry was the eternal favourite but Apple realized the potential for change and used its ipod platform to build the hugely successful iPhone. Ashish Kumar & Rahul Prakash 6 . Apple gets its hardware manufactured and assembled in china. Market research agencies. Apple has been a game changer in this smartphone market. Earlier the manufacturers made computers. when they understood that wanted a portable computer the Laptop came into existence. While the market share of Blackberry have been declining over the years while that of Apple‟s have shown a steady increase. it is remarkable. Such kind of environment does affect each other market shares. Agents. At the same time they have their own adroid powered smartphones which pose as a competitor to Apple. The Android phones though are just two years old they have been able to achieve exponential growth. Smartphones have affected the other electronic media such as TV.

Marketers are particularly interested in the roles and relative influence of the husband. wireless providers must pay attention to economic factors. such as economic booms and recessions. the wife is traditionally the main buyer for the family. etc. The challenge for a marketer related to Smart phones market is to understand how this might affect demand for products and services. GPS technology and product development drive the competition aspects of the smartphone market. Factors within the macro-environment are cultural and social. If consumers can't afford high-priced smartphones. These generally have a much wider influence and their effects become apparent more slowly than factors within the company. especially in the areas of food. Usually young or children at home actively participate in providing Ashish Kumar & Rahul Prakash 7 . Technology Smartphone technology changes frequently.2 Macro-marketing environment Factors considered within the macro-environment affect not only the company. free applications and new technology. also drives the smartphone industry. consumers. Smartphone companies develop products continually to compete for sales among a global pool of tech savvy consumers who demand the latest technology. with increasing numbers of women in full-time work and many men becoming “home workers” (or “telecommuting”) the traditional roles are reversing. consumers could pass on the mobile devices for which they provide services. political and legal. If wireless service is too costly. household products and clothing. but all the other members of its micro-environment. wireless technology such 3G and 4G. namely its suppliers. Likewise. Economic The state of the economy. companies must find ways to market the phones to the public. Social The family unit is usually considered to be the most important “buying” organisation in society. However. even when it means scaling back features.NIIT University Electronic Media and Marketing Environment Publics Yet to be filled 3. There is evidence that the traditional husband-wife buying roles are changing. It has been researched extensively. demographic. technological and environmental. Almost everywhere in the world. bluetooth compatibility. The development of new software applications. wife and children on the purchase of a large variety of products and services. cellphone camera resolution.

iPhone vs. Senior Manager. thus as a company a product catering young and middle aged need to be promoted.NIIT University Electronic Media and Marketing Environment input or selecting smart phones. the capabilities of smartphones are convincing more and more consumers to make the leap from a simple mobile phone to a more sophisticated device. Ashish Kumar & Rahul Prakash 8 . Nielsen data shows that 23% of mobile consumers now have a smartphone. Demographics This is the study of changes in the size and make-up of the population. While these changes occur slowly and can be predicted well in advance. only the foolish manufacturer ignores the effect they might have on business. Android Don Kellogg. As of Q1 „10. up from just 16% in Q2 „09. The Nielsen Company Whether it„s checking email on the go. connecting with friends through social networks or using turnby-turn navigation. Research and Insights/Telecom Practice.

Android users tend to be slightly younger than their iPhone peers. age is also a prime determinant of income and education. Perhaps what sets iPhone and Android apart from the rest of the field of smartphones is operating system loyalty. there are some striking differences. At the same time.NIIT University Electronic Media and Marketing Environment Vying for their share of the smartphone market are two of the tech industry‟s fiercest competitors: Apple. Although Android and iPhone users both skew male (Android users show a 54/46 gender split compared to iPhone‟s 55/45). Between Q4 ‟09 and Q1 ‟10. Android and iPhone‟s share of the smartphone market grew by 2% each.55% of Android users are under the age of 34 — while just 47% of iPhone users fall within the same demographic. 80% of iPhone users want their next device to run iPhone OS while 70% of Android Ashish Kumar & Rahul Prakash 9 . and Google. with its iconic iPhone. with its fast-growing Android operating system. As is usually the case. with Android users slightly less wealthy and less educated. smartphone leader Blackberry lost 2% share to fall to 35% of all smartphones while Microsoft‟s Windows Mobile OS also lost 2% to fall to 19%.

Among Android and iPhone users who would like to switch operating systems. Given that iPhone penetration is three times that of Android. If the citizens are very concerned about safety issues. more iPhone consumers are willing to try Android. However. Rim refused this request saying that its data encryption is designed so that no third party or Rim itself can access the data being transmitted wirelessly. which represents the popular opinion of the citizens of the region. then there will be a lot of rules and regulations governing things such as transportation safety. Political and Legal It is often a direct consequence of the political parties in power. which will make it more expensive for some companies that have big shipping costs. pro-Big Business then probably taxation will be modest and there will not be a lot of stringent rules about environmental considerations. for example. Indian security officials demanded that the encryption used by the Blackberry network is lowered from 256 bits to 40 bit encryption.NIIT University Electronic Media and Marketing Environment users want another Android device. Furthermore Rim argued that four other mobile products providing similar services are not facing the same demands Ashish Kumar & Rahul Prakash 10 . This is in stark comparison to other major smartphone players: only 47% of Blackberry users want another Blackberry while only 34% of Windows Mobile users want another Windows Mobile device. If the citizens are. the rate at which Android users would like to try iPhone is twice as high as that of iPhone users who would try Android. Smartphone major RIM (Blackberry) face One trade barrier while trying to get it's Blackberrys into the Indian market was Indian security. for example.