Blackberry Strategy

blackberrys strategy to suck up securities industry place comp whiznt in the mainstream mart and The use of onward motions to achieve its goals Team JMARCS Bozak, Dasgupta, Feng, Kumar, Sharma, Tu SET 1G MKTG-1102 teacher Don Linder October, 22, 09 Introduction question In Motion ( bank) is a lead frameer, manufacturer and food tradeer of innovative wireless root words for the worldwide rambling communication theory mart. (Reseach In Motion) edge was founded in 1984. mouth now has offices in due north the States, Europe and Asia Pacific. blackberry is a suck of wireless handheld devices that was barge ind in 1999 as a dickens-way pager.In 2002, berry was released, which supports push e-mail, mobile tele call in, text messaging, internet faxing, web browsing and early(a) wireless tuition processs. It delivers information everyplace the wireless data networks of mobile scream service companies. berry holds the worlds second highest market component in the q uick-witted telephone set platform, capturing 21% of worldwide smart phone gross gross in Q2, 2009. On 30 May 2009, backtalk announced the number of blackberry bush subscribers has reached well-nigh 28. 5 billion. (Wikipedia) blackberrys competitor apple introduced the iPhone in 2007 which was named the purpose of the Year by Time Magazine. orchard apple tree iPhone is growing at a very impressive rate and with introduction of iPhone 3GS, Apple looks all garb to overtake sassing by mid of 2010 and become number two player in smart phone market. Analysts were saying that line is unbelievable to maintain its over 50% mete out in marriage America due to growing competition from Apple, Motorola, and decoration, among others. (Wikipedia) Problem How does sass off market fortune in the consumer smart phone market? Key Findings Consumer doings Two types of users for smart phone guests ? Enterprise nodes- berry was a friendship decision. ? Non-Enterprise customers- blackb erry bush was a personal decision. agree to Canalys Research, touch harbours became the favourite(a) interface, representing 40% of all shipments. Upon recognizing Apples success with the iPhone touch screen interface, edge introduced its own touch screen device called berry act in end of 2008. (Canalys Research) According to Canalys Research, Smart phones have been opposing the manufacturing norm, with shipments growing despite the worldwide recession. Canalys Research) Company information An aggressive buy-one-get-one promotion by Verizon Wireless helped RIMs BlackBerry abridge ingrain past Apples iPhone to become the best-selling consumer smartphone in the U. S. in the first quarter (Q1) of 2009. (NPD Group) iPhone is scoop shovel to major carriers such as AT (in US), Rogers and Fido (in Canada) and O2, T-Mobile, Vodaphone (in Europe) and many smaller carriers nearly the world. Verizon and Vodafone are heavy kindlers of BlackBerry. Palm exclusive to Sprint unti l 2010. RIM has success totaly expanded its product portfolio to include a wide election of devices and interfaces that appeal to a range of customers at varied bell points. Market Share The battle between iPhone and BlackBerry is over the Non-Enterprise market, as the users of smartphones are attach in this segment. RIMs consumer smartphone market deal out increased 15 per centum to nearly 50 percentage of the smartphone market in US in Q1 2009 versus the prior quarter, as Apples and Palms share both declined 10 percent each. (NPD Group) According to NPDs Smartphone Market Update report, U. S. consumer gross sales of smartphone hand couchs in first-quarter, 2009, stratified in the following parliamentary law 1.RIM BlackBerry Curve (all 83XX models) 2. Apple iPhone 3G (all models) 3. RIM BlackBerry draw 4. RIM BlackBerry Pearl (all models, withdraw flip) 5. T-Mobile G1. (NPD Group) According to Gartners query, the smartphone sales grew 27 percent during the period. In smartphones Nokia came in choke save their market share dropped from 47. 4 percent in Q2 2008 to 45 percent in Q2 2009. RIM apothegm 1. 4 percent jump in market share, which brought their number to 18. 7 percent. Apple saw the biggest jump from 2. 8 percent in 2008 to 13. 3 percent in Q2 2009. (Gartner) Gartner says Apples expansion into a larger number of countries in the past year has produced a clear effect on sales volumes, as have the recent price adjustments on 8GB 3G iPhone. (Gartner) Assumptions RIM has the requirement financial resources or the smasheds by which to promote its product. RIM as well penurys to have enough financial reserves to absorb bring low profits due to aggressive promotions. SWOT Analysis We have quotes from our research actroupeing the statements below. These quotes are designed to further illustrate the meaning of the statements. Strengths global prominence and financial stability of the BlackBerry print in North America get outs a so zzled platform for product innovation. Over 35 percent of 2007 revenues were from global sales outside North America. Between 2001 and 2007, the company grew its workforce from astir(predicate) 1250 employees to more than 7000 employees. (Grewal, 2009) RIMs BlackBerry offers a varied set of products to identify the needs of the varied segments of users. RIM has a material line up of smart phones such BlackBerry Curve and BlackBerry Pearle with the habitual QWERTY keyboard. The mod serial publication include clean and sharp BlackBerry clear-through and BlackBerry Storm.RIM has also introduced BlackBerry App World where you can download and leveraging apps from a smart phone. So far RIM has effected a strong base with professional users because of their products availableity and security. Storm, the new BlackBerry is among RIMs strongest moves so far to appeal to the change magnitude number of consumers opting for multimedia phones, a market that is increasely turning to touch-screen devices for their ease of use. (The Wall Street Journal) BlackBerry carries a range of reasonably priced products which gives their customers the most selection in the smart phone market. Our checks show AT store reps appear poised to recommend BlackBerry to shoppers deterred by iPhones $599 (U. S. ) price tag, (The Globe and Mail) RIMs strength in the smart phone market is its impressively sized distribution network to provide products and services to the consumer. Retail consumers and corporate clients can buy the BlackBerry from more than euchre carriers and distribution partners in about 170 countries around the world. (Leader-Post) Weaknesses RIM has a weak entertainment platform for its product compared to its biggest rival Apple, which specializes in consumer friendly multimedia device.Below, we have a recent quote from BlackBerry CEO Jim Balsille, who emphasizes the companys need to center on on the non-enterprise market. As we head into the 3rd quart er we look forward to gaining traction with BlackBerry services in new market segments to drive the next leg of growth for the company, (Perez) BlackBerry is weaker mug compared to Apple and Nokia in the consumer sector. They have only recently started to promote their product for the mainstream consumer. The company expects to ship between 9. 2 million and 9. million BlackBerry smartphones next quarter, as it prepares for follow-ups to common devices such as the Storm and Bold. But some analysts expressed concern over its push to the mainstream because it would mean that RIM would be competing more directly with its consumer-friendly rivals. (Perez) Due to the relatively high prices of BlackBerry products, it has a harder time competing in emerging markets. Nokia has a strong presence in the low-cost part of the market. And its likely that the company exit continue to maintain strength here, leveraging its massive scale to forbid costs low. (Reardon) Opportunities Consume rs are more receptive to purchasing media online. This has a constraind a market that Apple has detonating deviceized on with its services like iTunes and Apple App Store. RIM has recently introduced their own app store which has so far received lordly reviews. RIMs app storefront leave alone be key to the firms farseeing-term success. Just as Apples App Store and iTunes drive sales of the companys ironware, App Worldwhich has received generally unconditional reviewsmust be attractive enough to lure users away from the other smartphones on the market. (Gibbs) Due to increased globalization and consumer acceptance of new technology, consumers around the world are ordering smart phones from their local carriers. This opens new markets for RIM to expand in. Despite global recession, the demand for smart phones grew as at that place was a 27 percent increase from Q2 2008 to Q2 2009. Threats Growing competition from Apple, Nokia, HTC, and Palm among others. Apple is expanding i nto a large number of countries while dismounting their prices which is increasing their sales volume significantly. Nokia is the largest smart phone provider with ample capital to develop their technology and products. But as the iPhone and other rivals expand their reach, RIM could find itself fighting for previously uncontested territory. (Leader-Post) The world economy is breathing out through a downturn. This has inevitably changed the consumer behaviour towards higher end devices. The topical economic climate is negatively impacting sales of higher end devices, (Gartner) RIM is susceptible to lawsuits because it holds countless unpatterneds for its products and its immense success makes it a quarry for patent holding companies like NTP. On March 3, 2006, RIM announced that it had colonized its BlackBerry patent dispute with NTP.Under the terms of the settlement, RIM has agree to pay NTP US$612. 5 million in a full and final settlement of all claims. (Reardon) Competit ive Analysis In the global smart phone market, Apple is growing exponentially with market share increasing from 2. 8% to 13. 3%. RIM has a gradual increase in market share of 1. 4%, which brought their number to 18. 7%. Nokia, the top manufacturer of smart phone is lagging behind with market share dropping from 47. 4% to 45%. Nokia is more affordable and is very spectacular around the world especially in the emerging markets such as India and China. They lso have a strong base with medium to lower income consumers. Because of the lower price point, they provide limited functionality compared to its counterparts. BlackBerry appeals to a vast customer base and its market is separated by products rather than income. The financially subtle customers are more accepting of products such as BlackBerry Curve and BlackBerry Pearl. In this segment, RIM competes directly with Nokias smart phones. This increases the popularity and brand recognition of RIM. RIM also invests heavily towards Res earch and Development to create superior products for satisfying the demands of higher end consumers.This customer base is more accepting of higher priced products because of their superior quality. This increases the strand RIM bangs compared to Nokia. Apples iPhone and RIMs BlackBerry Storm/Bold are in the same price range. However, RIM has a varied portfolio of products that range from $100-$500 US dollars. BlackBerry Storm and iPhone 3G are very similar products that share features such as touch screen interface and 3G software and hardware capabilities. Palm, Motorola, HTC and others are very limited in their market share. Their products are unremarkably cheaper compared to RIM and Apple with inferior quality.Examples of the inferior quality bequeath be no built-in Wi-Fi and low-resolution cameras. Unlike RIM and Apple, these companies use ternion party software such as Windows Mobile which has garnered negative reviews. According to a survey by CFI pigeonholing, it showe d that Windows Mobile users had a low take aim of customer satisfaction when compared to users of other smart phones. Out of a feasible 100 points, Windows Mobile rated only 66, compared with BlackBerry (73), Google Android (77), and iPhone (83). This corresponds with the decline in Windows Mobiles share of the Smartphone market by 2. % in 2009. (Wikipedia) Target Market Our mug market for the problem is the entertainment-focused users who range in age from mid-teens to early 30s. They see a mobile device as a lifestyle choice, and theyre unstrained to pay extra for a device thatll help keep them entertained. This group pass on use the device for things like multimedia entertainment, social messaging, and gaming. Our target group needs to be relatively affluent with disposable income therefore, they leave likely be based in developed continents such as North America, Europe and Australia.RECOMMENDATIONS resource 1 We gain market share in the consumer smart phone market by lo wering the price of BlackBerry Storm and BlackBerry Bold. The price of the Storm and Bold series leave behind be displace by $50 in an front to increase sales by 25%. Advantages 1. Lowering the price of BlackBerry Storm and BlackBerry Bold lead be a strong incentive for mainstream consumers to direct those products over BlackBerrys competitors. 2. As lowering the price leave alone make the products more affordable, new users and carriers from other countries result adopt BlackBerry products. . Lowering the price of BlackBerry Storm and BlackBerry Bold leave not only bring in users from the open up mainstream consumer base but also new users who are transitioning to smart phones from handsets. This will create a great awareness of BlackBerry products. BlackBerry could use this recognition to introduce new products. Disadvantages 1. A part of the customer base efficacy study the decrease in price will correlate with a decrease in quality. Therefore, they might avoid buyin g lower priced BlackBerry products. 2.Competitors might lower their price to compete with BlackBerry which will create nominal additional revenue from new customers. The already decreased profit margin from lowered price combined with minimal increase in revenue will decrease profits. 3. RIM might drowse off money by over producing BlackBerry Bold and BlackBerry Storm as its sales forecast didnt realise actual customer demand. They might lose customers and harm their brand by under producing the products as their supply wint be enough to meet the demands of the customers. This will generate provoke and dissatisfaction towards RIM. Alternative 2 We gain market share by pass different products targeted to specified segments of consumers (niche marketing). Advantages 1. RIM will create new market segments (market segmentation) that will correspond with the needs of specific demographic of consumers. 2. RIM will attract more consumers with the larger line up of products and serv ices. This will be able to expand their brand name. 3. RIM will have greater margins with these targeted products as customers are willing to pay more for products that are more in sync with their needs. The increased margins will increase the profits.Disadvantages 1. Introducing new products involves a significant investment in start up for Research and Development. recession markets are usually much smaller than the mainstream market and therefore it will be harder for RIM to sell enough BlackBerry devices to recuperate its sign investment. 2. Consumers may not be interested in the new products. retention in mind the current economic conditions, consumers might delay their purchase of luxury products like a BlackBerry. They might also continue with handed-down alternatives like handsets to meet their needs. 3.It will dilute the brand. BlackBerry already has an established brand that their customers identify with. Expanding the product base rapidly will bewilder customers about BlackBerry products and negatively affects sales of their bestsellers such as BlackBerry Storm, Bold, and Curve. Alternative 3 We gain market share by increasing advertisements on TV and internet which would increase our brand recognition. Advantages 1. With unique and notional marketing campaigns, RIMs products will be more recognizable compared to its competitors such as Apple and Nokia.RIM will gain market share by getting its competitors customers as well as attracting new customers switching to smart phones. 2. A successful advertising campaign will retain encourage brand loyalty from RIMs existing customers. These customers might choose RIMs product in the future because of their comfort level with the BlackBerry brand. 3. It will attract new customers by detailing the merit of RIMs products over its competitors. Disadvantages 1. RIMs campaign might be ineffective because of the oversaturation of advertising campaigns from the different smart phone manufacturers. 2.Increas ed advertising does not necessarily ensue in increased sales. RIM might spend excessive amounts on promoting their products which may not be successful and hurt their bottom line. 3. suicidal advertising might alienate a portion of their existing customer base. An example would be RIMs spokesperson (celebrity/ath permite) commits a crime. In this case RIMs doubling might be tarnished by association to the person. Solution Problem How does RIM gain market share in the consumer smart phone market? Alternative 3 We gain market share by increasing advertisements on TV and internet which would increase our brand recognition. We believe this solution is most likely to succeed and deliver results. For the near term, RIM will follow Apples example and attempt to meet the functional and psychological needs of consumers. An example of meeting a psychological need would be to primarily use BlackBerry products as a dash statement or a status symbol over its think purpose. This is only poss ible by extensive promotion in order to make the BlackBerry the it brand among the mainstream consumer. BlackBerry has a more diverse selection of products compared to Apple and Nokia.It should capitalize this strength by advertising the benefits of its products to the consumer segments. Promotions will bring in new customers. In future, these new customers might upgrade to other BlackBerry devices. They will also spread the word about BlackBerry creating goodwill and admiration for the brand. Advertising also has a long term goal in mind which is to grow the BlackBerry brand worldwide for years to come. Implementation Plan Step 1 drainage basin the consumer base into manageable market segments. Step 2 Target a segment to pursue. Step 3 Determine how BlackBerry would be positioned in the segment.Step 4 Our marketing objective will be to gain share in our segment. Step 5 Communicate the value of the BlackBerry through the use of television, magazines and the Internet. Step 6 We will evaluate our carrying into action and make adjustments for an improved process. Plan B Problem How does RIM gain market share in the consumer smart phone market? Alternative 1 We gain market share in the consumer smart phone market by lowering the price of BlackBerry Storm and BlackBerry Bold. The price of the Storm and Bold series will be lowered by $50 in an effort to increase sales by 25%. This plan will also increase BlackBerrys market share. It will bring in new mainstream customers for the very popular BlackBerry Storm and BlackBerry Bold. These products are direct competitors for Apples iPhone. The price decrease might lure Apple customers to switch to BlackBerry products as the quality difference between the products is minimal. The likelihood of RIMs competitors lowering their price to counteract the decrease in their sales is low, because that will lower the margin of the whole sector rather than just one company (RIM).To avoid these price wars, they will let RIM enjoy t he increased market share. Course Concepts Major concepts used were a) The Marketing Research Process We used the format showed in Exhibit 5. 1 in page 122 of the Marketing book. We made a rough copy in class that defined the problem clearly and the objectives. We delegated the objectives to group members. We performed researched on it and dispassionate the secondary data. We then analyse all the data and wrote this paper. b) The Marketing environment Analysis Framework We used this framework extensively throughout our project.We analyzed SWOT (Strengths, Weaknesses, Opportunities, and Threats) of RIM in detail. SWOT analysis helped us design solutions based on RIMs strengths and weaknesses. We also made solutions that let us develop the opportunities and guard us from the threats. We integrated the Macroenvironmental Factors such Competitors, Demographics, accessible/Cultural and Economic. c) We identified segmentation, targeting and positioning in our Implementation Plan. This helped us focus on a group of customers and to come up with solutions that will meet our goals concerning this group. ReferencesCanalys Research. (n. d. ). Smart phones defy torpiddown. Retrieved 10 22, 2009, from Press and Research releases http//www. canalys. com/pr/2009/r2009081. htm Gartner. (n. d. ). Gartner Says world(a) Mobile Phone Sales Declined 6 Per centime and Smartphones Grew 27 Per Cent in Second Quarter of 2009. Retrieved 10 22, 2009, from Press releases http//www. gartner. com/it/page. jsp? id=1126812 Gibbs. (n. d. ). Why RIMs App World Is Key to Its Long-term Success. Retrieved 10 22, 2009, from GigaCom http//gigaom. com/2009/09/28/app-world-will-be-crucial-for-RIM-as-smartphone-space-heats-up/Grewal, L. P. (2009). In Marketing (Canadian Edition ed. , pp. 3-4). McGraw-Hill. Leader-Post. (n. d. ). Analysts pessimistic about RIMs market share. Retrieved 10 22, 2009, from business enterprise http//www. leaderpost. com/business/story. html? id=2033215 NPD Group. ( n. d. ). RIM Unseats Apple in The NPD Groups Latest Smartphone rank . Retrieved 10 22, 2009, from Press release http//www. npd. com/press/releases/press_090504. html Perez, M. (n. d. ). BlackBerry manufacturing business Pushes For Mainstream. Retrieved 10 22, 2009, from Information Week http//www. informationweek. om/news/personal_tech/blackberry/showArticle. jhtml? articleID=220200247 Reardon. (n. d. ). Smartphone sales slow amid troubled economy. Retrieved 10 22, 2009, from CNET http//news. cnet. com/8301-1035_3-10113288-94. html Reardon, M. (n. d. ). Market to be dominated by smartphones and low-cost handsets. Retrieved 10 22, 2009, from CNET Crave http//asia. cnet. com/crave/2009/08/14/market-to-be-dominated-by-smartphones-and-low-cost-handsets/ Reseach In Motion. (n. d. ). Company. Retrieved 10 22, 2009, from RIM http//www. RIM. com/company/index. shtml The Globe and Mail. (n. d. . iPhone price may help BlackBerry. Retrieved 10 22, 2009, from Featured Market Blog http//www. the globeandmail. com/blogs/markets/iphone-price-may-help-BlackBerry/article767553/ The Wall Street Journal. (n. d. ). BlackBerry With position Screen Planned . Retrieved 10 22, 2009, from Business http//online. wsj. com/article/SB121087480469495889. html Wikipedia. (n. d. ). BlackBerry. Retrieved 10 22, 2009, from Wikipedia http//en. wikipedia. org/wiki/BlackBerry Wikipedia. (n. d. ). Windows Mobile . Retrieved 10 22, 2009, from Wikipedia http//en. wikipedia. org/wiki/Windows_Mobile