Case Study
Blackberry‟s Rise in Brand
Power
Robyn Christison
Victoria Raedcher
Brett Burns
Maggie Hermano
Jabeel Janmohamed
Sarah Makela
MKTG 1102
Set E – Group A (Tuxedo Cats)
Tom Jopling
October 19, 2009
Problem
How will RIM use marketing strategies to position them to dominate the business market as well as gain
market share from their competitor the iPhone?
Introduction
Blackberry was the first Smartphone on the market, but today RIM is struggling to maintain brand
dominance in the Smartphone industry. Although there are a number of competitors such as Palm, Nokia,
Samsung, Motorola and Sony that cannot be overlooked, the Apple‟s iPhone seems to be Blackberry‟s main
threat. According to Figure 3 (Appendix A), Apple‟s global market share has seen a 626.9% growth from
2008 to 2009. The iPhone has become the trendy and desired Smartphone of the year. Blackberry has had to
increase its target market, and expand its brand to appeal to a new consumer market in order to keep up
with Apples sales. Figure 1 (Appendix A) shows the October 16, 2009 RIM market crash that gave the
company and investors a bit of a reality check. Figure 2 (Appendix A) illustrates that the gap between Apple
and RIM in 2009 is widening; this is likely attributed to the success of the iPhone. The situation is clear,
RIM must come up a way to continue to dominate the Smartphone market using a number of growth
strategies to re-invent their target market and re-capture their existing market.
SWOT Analysis: RIM Blackberry
Strengths
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Weaknesses
Currently hold Smartphone market share
Email capabilities (large scale email network)
BBM – Exclusive messaging service for Blackberry users
Good customer service rating
Recognizable brand/Brand loyalty
Trade in services for new users
Sleek professional look
Full keyboards
User friendly
Dominate business market
Extensive product depth
Enterprise email and software (easy to interact within
businesses) – safe to exchange high profile information
Opportunities
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Small screen
Not yet efficient between international users
High Costs
Expensive data plans
Poor application with computers
Poor picture quality
Poor interface
No operating systems for Mac computers
Bad user interface
Bulky
Click screen
Can‟t synch with iTunes library
Not as intuitive as many touch screen phones
Threats
Globalization
Applications market
Product breadth
Co-branding
Mobile Gaming Market
Social media - Twitter, Facebook, MySpace
Ability to supply for a high demand – Blackberry can provide
services when the competition cannot keep up with demand
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The Apple I-phone
The Palm-Pre
My Touch
Economy
Changes in the Canadian dollar in terms of export
SWOT Analysis: Apple iPhone
Strengths
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Simple to use
Aesthetically pleasing
Considered trendy and chic
Large screen
3G
Applications store (over 75,000)
Supporting software: iTunes, apple computers, iPod, iTouch
Easy to navigate internet
me.com (ability to use GPS/Google maps to locate a lost iPhone
and control its data from a computer)
Affordable data plan
Includes all in one: photos, music, internet browser, application
of choice, text, phone
Opportunities
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Penetrate the business market
Globalization
Weaknesses
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Fragile screen
No hardware keyboard, more difficult to type than other types
of phones
Business networks: work in progress
Threats
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Economy
Competition
Three Alternatives
1) Product Development
Blackberry introduced the Smartphone and enjoyed the massive success and sales until a number of
competitors began to take market share. As mentioned above, on October 16th 2009, RIM announced that
they had experienced a larger than usual drop in sales, affecting stocks. This left the business world
wondering if Blackberry was still the leader in Smartphones. This drop is an indication that the Blackberry
product is entering its maturity phase. Although Blackberry has strong brand loyalty and awareness, how
will the company use product development strategies to combat dropping sales and continue to grow before
falling into a decline?
As a product development strategy, RIM is recommended to co-brand with HP and create a Blackberry
inspired laptop and increase product breadth. This laptop will reflect the Blackberry brand as well as make it
easier for Blackberry Smartphone users to sync information from their Smartphones to their computers.
This product development strategy is creating a compliment product to the Blackberry that benefits
Blackberry users. This is will directly compete with Apple, in the sense that the iPhone has a number of
compliment products and a very extensive product breadth.
Product
An HP/Blackberry version Laptop that reflects the „business chic‟ look of a Blackberry Smartphone. This
laptop would feature an easy music/media interface, photo album/editor, the ability to use Blackberry
Messenger and transfer phone contacts on to the laptop, a data transfer network exclusive to Blackberry
users and a free training guide with purchase.
Price
The Blackberry version laptop will sell for $999.99 with a $200 rebate for existing Blackberry owners or
anyone purchasing one new with their laptop.
Promotion
Aggressive international media marketing through social networking sites and TV commercials will be
launched with the slogan “Work and Play”. Celebrity endorsements will be used to reflect the
multifunctional products and existing business contracts will be offered an upgrade to Blackberry/HP
contracts.
Placement
RIM and HP will market their products globally to any market both companies are currently in and
distribute intensely to current businesses who hold Blackberry contracts. This will provide a significant
advantage for RIM as HP has an established global presence. The product will be available for purchase from
HP and RIM‟s website as well as all major electronics retailers.
2) Marketing Penetration
By focusing on their existing marketing mix and customers, the company will use marketing research to
improve their existing products and increase their advertising and promotion strategies to aggressively
market their products.
After a thorough SWOT analysis on both the Blackberry and the iPhone, research shows three key issues are
causing Blackberry users to switch to the iPhone. These include the higher cost of the Blackberry, poor
international access, and limited web browsing abilities. For large companies, many have found the iPhone is
cheaper to use as well as having a number of similar business features, plus better web browsing and
applications (MacDailyNews 2009). The iPhone was also reported to have better “seamless integration”
when travelling in countries such as Korea, Japan and the United States (2009).
Thus, one option is to launch an existing product that includes improvements to a number of features and
better communicates these features to its customers, to better compete with the strengths of the iPhone.
With the release of the „Blackberry Curve World: Anniversary Edition‟, Blackberry will aggressively market and
promote an elite and improved version of their traditional product. The new Blackberry Curve World
edition that includes significant improvements in applications, web services, and abilities, will be distributed
internally at a more competitive price. The product will penetrate existing markets but with an aggressive
advertising strategy, increased promotion, and a number of services attached to the product.
Product
The Blackberry Curve World: Anniversary Edition will hold more memory, have a new version of Blackberry
Messenger that functions internationally between users, a camera on the front to use as a webcam, more
intuitive web browser and increased software such as applications, Photoshop and the interface will be more
intuitive and easier to manoeuvre. There will be a Green accent – made from a recyclable product like
aluminum.
Price
The price will be competitive with the iPhone and half price for existing customers who wish to upgrade.
Promotion
There will be increased advertising promoting the features we have but people may not know about with
improved communication to their consumers and simple yet entertaining television commercials (emphasis
on Blackberry App World). Blackberry will provide informative workshops and continue to endorse the
international band U2.
Placement
Product is targeted at existing markets (ages 17-65) promoted through a number of mainstream media and
social networking sources.
The main advantage to this product and growth strategy is the ability to use this phone internationally to
communicate with other Blackberry users. By making this product easy and affordable to use overseas, RIM
is keeping up with the globalization trend and its demands to satisfy the needs of their customers.
3) Market Development
The Blackberry has traditionally been an exclusive device for business and professional consumers. However
with the success of the iPhone, RIM is recommended to use their brand and product development strategies
to connect with new market segments internationally. This new market segment would include the
consumer market of a younger generation, typically aged 14-30. A new product geared towards this target
market would be promoted through mainstream media and social networking sites.
Through extensive product development and design processes we recommend a new product called the
Blackberry Beat! It is assumed that many people in this target market enjoy the music capabilities of the
iPhone; therefore RIM must recognize this as an opportunity. The Blackberry Beat! is a Smartphone product
that specializes in music and download capabilities. This product will be aggressively promoted through
celebrity endorsements and will sponsor concerts. However we understand that different countries have
different tastes and characteristics, and we must consider geographic, demographic and psychographic
segmentation factors. For example, in North America the Blackberry Beat! will reflect artists such as Carrie
Underwood and The Jonas Brothers to reflect North American music genres. However, in areas such as
France the Blackberry Beat! will be associated with artists and media most popular in French culture. This is
the step needed to capture different types of consumers as well as allow the product to grow internationally.
Product
The Blackberry Beat! will be smaller in size and available in a wide range of colour. It will specialize in
music/media and offer free music software/interface through Windows Media Player. Personalized
headphones and music dock sold separately.
Price
Exclusive cost of $399.99 or $79.99 under 3 year contract with optional music dock for $99.99.
Promotion
Product will be strategically placed in mainstream television shows, sponsor concerts and have commercials
before big movie hits.
Placement
Product will be released one month before Christmas aimed at consumers aged 13-25. Different promotion
strategies will reflect the demographic and geographic tastes of an area.
If successful, there is now a new market to expand on products similar to the Blackberry Beat!
Complimentary products such as the music dock, speakers, headphones, and mobile hook-ups are endless
and this could be a way for the company to increase their profit margin. A disadvantage is that music players
have become so sophisticated there is a lot of competition in the market.
Solution
After careful analysis and deliberation, the marketing strategy we identified as most optimal for growth in
the current Smartphone market is Product Development. By partnering with HP to create a co-branded
Blackberry inspired laptop and leveraging their already successful and trusted global brand, we feel that RIM
will be able to sustain and grow their Smartphone sales in the business market as well as gain market share
from the iPhone.
Implementation Plan
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Establish co-branding partnership with HP for new laptop
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In collaboration with HP, design and configure a turn-key laptop that will appeal to business users as
well consumers currently using Apple products
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Develop all-in-one software package that will be pre-loaded on the laptop that will allow for easy
transfer and management of data to and from Blackberry Smartphone
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Distribute package to existing regional and global retailers for sale, as well as HP and Blackberry
online stores
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Roll-out marketing campaign through social networking sites and series of national and global TV
commercial broadcasts
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Offer existing Blackberry business contracts to upgrade to Blackberry/HP contracts
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Provide free training and world-class support
APPENDIX A
Figure 1 - Stock Quote for Research in Motion October 12th to 16th 2009
Source: (Google Finance, 2009)
Figure 2 - Apple (Blue) and RIM (Red) Sales Figures 2005-2009
Source: (Google Finance, 2009)
Figure 3 - Global Smart Phone Market Shares 2009-2008
Source: (Canalys, 2009)
Reference List
Canalys (2009). Global Market Share by OS: Market Shares Q1 2009 Q2 2008. Retrieved October 16, 2009,
from
http://www.geek.com/wpcontent/uploads/2009/08/canalys_global_smartphone_market_by_os
_q2_2009.gif
Google Finance. (October 16, 2009). Research In Motion Limited Public Nasdaq: RIMM. Retrieved October
16,2009, from http://www.google.com/finance?q=RIMM
Google Finance. (October 16, 2009) Apple Inc. Public Nasdaq: APPLE. Retrieved October 16, 2009, from
http://www.google.com/finance?q=apple
MacDailyNews. (October 1, 2009). Why companies are dumping their RIM BlackBerry devices for Apple’s iPhone.
Retrieved October 15, 2009, from
http://macdailynews.com/index.php/weblog/comments/22610/