Blackberry’s Rise in Brand Power
The Dueling Marketing Strategies
of RIM versus Apple
Team C-KCALM
Team members:
Alicia Flores
LuizaBarbacuta
Krisztina Szabo
Ting Ting Zang
Xingyue Wu
MKTG 1102- Instructor: Jeff C Collier
October/ 2009
Introduction:
Over the years, RIM has taken the Blackberry from just a simple pager to one of the leading
smartphones on the market today. The evolution of the Blackberry from its early pager days to
what we have today didn’t just happen over -night, it took many years of trial and error to
develop this well put together product. The very first Blackberry, as we know it today, was
developed in 1998, and RIM has continued to build and improve their idea ever since. However,
with increasing pressure from competitors such as Apple with the iPhone (their version of a
smartphone) the question of whether or not Blackberry has the staying power to be able to
keep up with all the new competition weighs heavily on everyone’s minds.
Problem:
How can RIM maintain their strong hold on the smartphone industry with such a dramatic
increase in competition?
Key Findings:
RIM is a Canadian based company, with a remarkable success story. From their humble
beginnings out of Waterloo University in Ontario, to being named by Forbes Magazine as one
the fastest growing companies in the world, RIM is a company that just keeps pushing forward.
RIM has been able to expand and push their products onto the global market. In fact, 92% of all
their revenues earned come from outside of Canada. Blackberry phones have been able to span
a total of 150 different countries all over the world, perhaps this is why the sales in Q2, 2009
were high enough that Blackberry was able to secure 21% of the worldwide sales of all
smartphones.
Blackberry has been able to earn itself quite a bit a respect among consumers over the years,
with their constant improvements to their product and overall reliability. By paying special
attention to small details and developing innovative little touches like their security and remote
administration functionality, it helps to give them an edge over other competitors. However,
with increasing competition becoming more and more prominent, especially from Apple’s
iPhone, Blackberry will surely being counting more and more on their customer loyalty to help
carry them into the future.
The Apple iPhone has been doing extremely well for such a new player on the smartphone
scene. It has experienced such a great amount of success in such a short amount of time, it
would be impossible for RIM not to take notice. The iPhone is more of a trendy, hip product
geared towards a younger more youthful audience, whereas Blackberry phones have been
more typically used in business and geared towards professionals. Now with the development
of the Blackberry Storm, RIM will have a phone that will be in more direct competition with the
Apple iPhone. Time will tell whether or not these two competitors will be able to live in
harmony, or whether one will have to disappear from the market altogether.
Assumptions:
RIM has the resources they need in order to further develop their product line.
SWOT Analysis：
Strengths:
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The company provides strong technological support
Reliable service and product
Extreme customer loyalty
Focus is very clear, aimed at business professionals
Core products(blackberry series)
Fastest growing company in the world
Weaknesses:
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Lack of revolution or development for the product
Too conservative by nature and not progressive
As a result of conservation, they do not make big investments for marketing
They are not sensitive to the competitors marketing strategy
Limited market. Mostly English based markets.
Opportunity:
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The trend of 3G and WIFI.
Globalization.
More and more people look at cell phones as not only a tool but also an entertainment
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device.
Many talented people want to work in this field.
Build firm relationships with communication networks and companies, for example, AT&T,
ROGERS, T Mobile, China telecom)
Threats:
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There are some big competitors (such as Apple) which provide similar features(mobile
phone, e-mail, organizer, internet device, music)
The big competitor, Apple, makes iPhone more attractive and fashionable than BlackBerry
which has a more traditional look.
Some competitors, like Apple, Sony, and HP, develop new phones to get the market share
for the young generation.
Apple invested huge amounts of money for advertising, developing market, and also
developing new technology.
Competitive analysis:
Current/potential competitors: BlackBerry’s biggest competitor is, without a doubt, Apple’s
iPhone. There are other competitors, like LG, Sanyo, Samsung, Motorola, Palm, Nokia, HTC and
Sony/Ericsson, but none of them compete in the consumer market as strong as the iPhone.
The study on the right shows customers satisfaction ratings with all companies. Apple’s iPhone,
is stronger in popularity mostly because of the association people do with all other Apple’s
products, like Mac computers, iTunes and iPods. These products are very popular with the
younger generation. BlackBerry is very popular with business people, politicians and even
popular with celebrities. Price wise, they are relatively equal, the difference between them
depends from provider to provider, depends on the plans and contracts with the different
providers. BlackBerry remains popular and is still in the race for first place, because of the email
capabilities, the internet applications, SM card from Verizon which gives BlackBerry’s phones
international roaming capabilities. Below is a list with some of the two phones features, which
proves that from many points of view, BlackBerry is still better than iPhones.
The success of both companies, RIM and Apple, will depend on the targeted market and on the
variety of related products they’ll have. After looking at the pros and cons of both phones, the
decision will be ultimately left to the individual’s taste.
Blackberry Target Market:
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Corporate, business customers purchasing the vast majority of the BlackBerry devices
and services. The BlackBerry has expanded beyond its roots as a wireless tool to read email, now offering such capabilities as business collaboration, social networking and the
sharing of data and documents.
Young individuals who like cool things, interact with friends, facebook etc..
People with the importance of mobility in foreign countries
With the releases of its Pearl and Curve devices, RIM has attempted to break into the
consumer segment. This, in turn, has enabled both handset manufacturers and wireless
carriers to lower costs, making the BlackBerry more affordable to the average consumer.
Recommendations
Alternative # 1:
Create a new series for a younger generation. The new series of phone will have a more
fashionable look, colorful outside, as well as 3G and WIFI inside. But, at the same time, RIM
should keep their classic series “BlackBerry” for business people.
Advantages:
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RIM will diversify their product line.
RIM will expand their target market to a younger generation and even more
business people.
Gain more income.
Disadvantages:
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RIM needs to make some big investments for developing a new series phones.
There is a high risk for expanding the product line.
Alternative #2
Open Asia Pacific Market.
First, build factories in Asia, provide a 2 year guarantee to each product, and lower the
product’s price. Then, work on developing partnerships with the local wireless carriers (China
mobile, DOCOMO, etc.). Third, invite local stars to do the commercials. Fourth, use multilingual
operation systems and add more entertainment elements (cell phone KARAOKE…).
Advantages:
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Greater number of potential customers. World’s biggest cellular market is in Asia, Japan
and China.
Increase brand impact and maintain brand reputation of great service.
Create new image of BlackBerry as both professional and entertainment.
Build a friendship with new customers by using well placed advertisements and provide
good service.
Decrease the risk of over depending on the U.S. market. As of 2008, 42% of RIM’s
revenue came from the U.S. market.
Disadvantages:
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High investment risk. The investment is huge and this is an unfamiliar market for
BlackBerry.
Hard to compete with the local cell phone companies. In Japan, over 80% of the market
is shared by local cell phone companies.
Highly dependent on technology. Different functions are required; different writing
systems, games, water proof, etc…
SMS message vs. E-mail. Most Chinese people prefer SMS and merely use cell phone to
send email.
Culture challenges.
Alternative #3:
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Diversify product line and extend software products. Build new professionally
developed and competitive sustainable advantages by creating new:
 Earphones
 New software
 Separate music device
 Computer line
Advantages:
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Product: BlackBerry has knowledge, technology and resources on hand. They built a
good brand name.
Price: Their prices are affordable, and can go lower than their competitors
Place: The BlackBerry provides a truly secure network, and critical business information,
its safe everywhere around the world. They have good relationships with retailers
internationally.
BlackBerry’s intuitive menus and ease of use make it hugely popular. And it's a scalable
solution, which makes deploying new users simple.
Disadvantage:
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Promotion: Their advertising is not as strong as other competitors. They are not strong
in promoting various available products for targeted customers.
Solution:
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Diversify product line and extend software products.
This strategy is recommended because BlackBerry has a big competitor company, Apple. The
goal is not to copy their competitor’s product, but to develop new products that Apple doesn’t
have and adopt new technology. Building professionally developed new products will help
Blackberry to stay on top of their competition.
Pros:
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Proven good quality products over the year
Leading sales
Good established brand name
Extend customer relations
Continue an international expansion strategy while also expanding product line
Cons:
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Involves massive advertising, which can be expensive
Need to hire more employees
Risky
Implementation Plan:
Our solution involves RIM diversifying their product line, and branching outside of just cell
phones. Before actually manufacturing any new products, RIM should ensure they are properly
equipped with the knowledge and know-how to make a new line of products. Whether that
means hiring more staff that specializes in the new merchandising areas or further training
existing staff so that they can become experts, they need to make sure that they don’t put out
below standard goods.
Blackberry, as a brand, already has a well-known, well respected name for itself; so by taking
advantage of that fact, there’s the opportunity of new products having a head start thanks to
their predecessor. To further take advantage of such a well established brand, the advertising
campaign should be somewhat over the top. This way, it would create buzz/ hype about the
products, and hopefully open up the world of Blackberry to a whole new generation.
Plan B:
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Open the Asian market
Use multilingual operating system
Provide 2 year guarantee to every product
Build partnership with Asian wireless carriers
Invite Asian stars be the advertisement spokespeople.
Course Concepts used:
SWOT Analysis: From the research we did we concluded that RIM (BlackBerry’s) strength lies in
customer loyalty, having a good reputation and innovative technologies. Their weaknesses
come from not enough good marketing, they need to get “in our faces” like Apple does. With
only one good commercial- PC versus Mac, Apple reminds us about all their products. They kept
their products so related to each other, you cannot say Mac without thinking iPod, iTunes,
iPhones ; so well advertised: if you see an “i” followed by a capital letter, it is, again, iTunes,
iPhones, iPod. Opportunities: make the BlackBerry business and entertainment oriented, with
chic designs, different colors, gender oriented; in this way they target the younger segment of
the population.
We applied the market development strategy, through which RIM should try and reach new
market segments, locally and/or internationally.
Also, diversification strategy: for RIM to remain successful, they should expand their line of
products, develop new products and improve old ones.
From chapter 4, we analyzed the competition (who is the competition), demographics who are
most likely to use BlackBerry’s or iPhone’s and generational cohorts.
Sources: This case analysis was developed by group D with reference to
A. Introduction, key findings, assumption, implementation parts
http://www.bbgeeks.com/blackberry-guides/the-history-of-the-blackberry-88296/
http://na.blackberry.com/eng/solutions/
http://searchmobilecomputing.techtarget.com/news/article/0,289142,sid40_gci1338352,00.html
B. Target market
The 2008 profit and revenues chart
http://www.wikinvest.com/stock/Research_in_Motion_(RIMM)
C. Competitive analysis pictures from and graphs:
http://www.macobserver.com/tmo/forums/viewreply/486430/ Rim’s drops in satisfaction ratings
http://www.evolife.cn/?p=4333 Cover page
http://www.theinternetgroup.com The pros and cons chart
http://forums.pinstack.com/showthread.php?t=89360 Side by side comparison chart
D. SWOT analysis
Forbes magazine, accessed August 2009
E. Case reference materials: Marketing, Canadian edition
Grewal, Levy, Persaud, Lichti, McGraw-Hill Ryerson, 2009