October-19-09
Set C
By: Amelia Felkranz
Lacey Rohrback
James Caron
John Hatch
Mattias Ekkert
Charly Park
Table of Contents
Problem Statement…………………………………………………………….Page 3
Findings………………………………………………………………………..Page 3 and Appendix A
SWOT Analysis………………………………………………………………..Page 3,4,5
Evaluation of Alternatives……………………………………………………..Page 6,7,8
Solution………………………………………………………………………...Page 8,9
Cost Analysis…………………………………………………………………..Page 9
Plan of Action………………………….………………………………………Page 10
Course Concepts……………………………………………………………….Page 10
Appendix A……………………………………………………………………Page 11,12,13
Works Cited………………………………………………………………...…Page 14,15
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Problem Statement
Research In Motion has focused its product development on a business oriented target market, to the exclusion
of the more progressive consumer market. What product strategies can Research In Motion employ to appeal
to this new lucrative consumer market, capture a larger share of the “Smartphone” market and stimulate longterm, successful growth?
Findings
General consumers for BlackBerry are ages between 18~49 with Caucasians dominating the ethnicity
demographic. Their main target market is mature consumers with only 8% of the ‘teen’ group owning
BlackBerrys. This makes it clear that BlackBerry is still not attractive to the younger generation. Refer to
Appendix A for more detailed information.
SWOT Analysis
Internal Strengths

Security: Blackberry uses end-to-end encryption for all communication (Research In Motion
Limited1, 2009). Advanced security enables customers to feel all data on their phone is safe
and secure which may give Blackberry a competitive edge over its competitors.

Strong brand image: This is important for when consumers are debating over which
Smartphone to buy because they w ill think of Blackberry first. Blackberry gained significant
brand recognition over 2007 and 2008. The brand value reached $13,734 million in 2008
which was a considerably large increase compared to its 2007 value (Datamonitor Plc, 2009).
RIM is a leading designer, manufacturer and marketer of innovative wireless solutions for the
worldwide mobile communications market.

Global brand: Over 21 million people use the Blackberry smartphones in 140 countries
around the world (Research In Motion Limited2, 2009). Being a globally recognized brand
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will make it easier to focus on expanding into global markets if the opportunity should exist.

Strong Revenue Growth: Revenue increase of 84.13% in 2008, operating profit increase of
57.23%, and net profit increase of 46.28%. These strong financials allows the company to
invest in new products or other possible growth opportunities (CBR, 2008).

Introducing the Blackberry Storm: By coming out with the new touch-screen Blackberry
Storm, RIM increased their variety of product mix which is important to stay competitive
with other touch-screen phones such as the iPhone.
Internal Weaknesses

Focusing the target market on business professionals: May lead to an effect on the
competitive position of RIM compared to Apple who focuses on both the consumer and
business oriented customer (Datamonitor Plc, 2009).

They have not focused enough attention on developing their ‘Apps’: May allow Apple to get
ahead of them in the market and overtake their possible market share for people who want
phones with entertainment applications (Campbell, 2009).
External Opportunities

Expand into the entertainment market: Because Blackberry is mainly aimed at the business
professionals target market there is a large consumer target market to focus growth into.

Expand existing business in Canada: Can do this by boosting awareness of the Canadian
ownership of the Blackberry brand.

The worldwide Smartphone market grew by 11% during the third quarter September 2008
and is forecast to record stable growth (Hesseldahl, 2009): RIM is one of the leading
suppliers of smartphones. Therefore the steady increase in the demand for smartphones in the
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consumer market will be a driving factor in financial growth for RIM.

Blackberry App World is open to a wide variety of personal and business apps which are
easy for consumers to download (TekecomWeb News Break, 2009): Because they only have
a few thousand ‘Apps’ available compared to iPhone’s which is 50,000, this is an opportunity
for RIM to continue to develop their penetration in the ‘App’ market (Campbell, 2009).

Consumer purchasing behavior in Urban Brazil shows that 29% of individuals in Brazil do
not yet have mobile phones (Ipsos, 2008): As this is the largest percentage within the reach of
RIM’s already existing global market for the Blackberry, this provides an opportunity to
focus on this extensive growth opportunity in Brazil.
External Threats

There are increasing pressures from competition with iPhone: In just 2 years Apple has
concurred 25% of the global market (Campbell, 2009).

The economic slowdown: Causes the general population to have less disposable income and
therefore the purchase of goods and services decreases which includes cell phones and cell
phone service.

The increase in supply of smartphones provided by competitors has caused decreased market
selling prices (Hesseldahl, 2009): This drives revenues down for RIM which may cause
them to become less profitable and may not be able to remain as competitive as the
competitors that have a larger market share and larger economies of scale.
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Evaluation of Alternatives
Alternative #1 –Co-branding with a software company like Microsoft, to create programs that are preinstalled
to computers purchased and are immediately compatible with the blackberry (e.g. online music store,
specialized media player etc).
Advantages:
1. This option will be more appealing to the “mobile lifestyle” of a younger, trendier target market which
enjoys having its phone, media player, computer and car audio player all compatible.
2. We anticipate growth in RIM’s product market resulting from the co-branding agreement with Microsoft.
The sheer volume of Microsoft sales would expand RIM’s target market beyond what it could do for itself.
3. We expect an increase in brand equity as a result of the partnership with a software conglomerate like
Microsoft. Blackberry and Microsoft each have very strong business brand equity and will mutually reinforce
one another.
Disadvantages:
1. There will be a large cost and significant risk in researching, testing and developing new integrated software
and programs.
2. There is the possibility of disputes involving revenue and royalty sharing.
3. We aren’t sure to what extend this strategy will detract from the current popularity and dominance of the
Apple product.
Alternative #2 – Brand extension, involving the creation of new products within the Blackberry name such as
stereo systems, portable DVD/CD players, alarm clocks/calendars and an innovative blogging forum
specifically tailored to Blackberry users.
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Advantages:
1. The Blackberry brand name is already established, so less time will be required in developing consumer
brand awareness. This will also result in lower marketing costs for the new products.
2. This option will offer brand extensions that will be more practical and widely accepted by a new target
market (young, hip and mobile).
3. We anticipate an increase in cross-category trial sales due to loyal Blackberry customers wanting to
experiment with new, trendy Blackberry gear.
Disadvantages:
1. This option could dilute brand equity if the extensions adversely affect consumer perceptions of the family
Blackberry brand.
2. The brand association could be weak as a result of the new, trendy consumer products clashing with the
more formal business Blackberry brand.
3. We are assuming that these brand extensions will be superior enough in value to persuade customers to
switch from their current brands.
Alternative #3 – Increasing product breadth by creating a new brand owned by RIM but not directly affiliated
with the Blackberry brand name. The new brand will then host an innovative line of phones targeted
specifically to a newly defined consumer market.
Advantages:
1. A new, trendy, exciting brand personality can be established separate from the somewhat staunch business
affiliation of the Blackberry brand.
2. A predicted increase in appeal to a newly constructed, younger, hipper consumer market.
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3. The Blackberry brand can remain focused on business phones and maintain its loyal clientele without the
possibility of tarnishing its market-leading reputation.
Disadvantages:
1. The need to promote an innovative brand to compete with companies like Apple who have entrenched brand
equity in the market.
2. The high cost of marketing an innovative brand with no established credibility or brand equity.
3. The perceived value of the new brand’s products may not be greater than the perceived value of the current
Blackberry products.
Solution
Alternative #3- We feel that the entrenched business oriented image of Blackberry will make it difficult to
market new products to younger, trendier consumers. In order to penetrate a new demographic, we believe it’s
necessary to shed the business image and proceed with a totally original brand of phones to appeal to younger
consumers. This brand can then be given a completely new image without the possibility of detracting from
Blackberry’s loyal business clientele.
New consumer target markets
A) Teens 13-17 from middle to upper-class suburban homes, who are social and keep up with trends.
They are involved in after school activities (sports teams, etc) and have good relationships with their
families. Need multi-purpose product for music, games and to keep in touch with family and friends at
a low cost. Phone mainly for social purposes and would enjoy a customized phone to display
individuality.
B) Young adults between ages of 18-29. Post secondary students who have lower incomes due to part
time jobs. Balanced lifestyles between school, work and social activities. Want some sort of luxury at a
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low cost and needs the product to help keep their life organized. Living on their own for the first time
and rely on a cell phone rather than a home phone line.
C) Single parents between ages 30-50 who are looking to date or meet people. Annual income between
$35,000 and $100,000. Both male and female. Social, balanced lifestyles. Enjoy social networking.
Career oriented, busy, city lifestyles. Has social life on weekends without children.
After reading the annual financial reports for 2008 we have determined the following. Blackberry has been
increasing spending in all areas of concern, research and development was ~$360 million, up 34% ~$124
million from 2007. Also selling, marketing and administration was up to ~$881 million, a 37% increase of
~$344 million (Research In Motion, 2009). Whereas Apple Inc. has made substantially larger investments in
both sectors R&D was ~$1.1 billion up 29% ~$327 million from the previous year. Selling, marketing and
administration was ~$3.7 billion, up 22% ~$798 million (Apple, 2008).
Apple has a full line of computers and media playing devices that are not relevant for our comparison. This is
of significance if considering the competitive edge that it maintains with having a truly compatible media
platform, in our case it isn’t important for us to compare because it isn’t part of our selected solution. Even
from an assumption based standpoint, it would be quite difficult to calculate what percentage of their budget is
strictly for the iPhone. Needless to say the larger percentage of investment that RIM makes may not be enough
yet to get into the same range as Apple.
There is one factor to consider, with regards to the dynamic between Apple and RIM’s marketing strategy. It is
a common fact that RIM has achieved an incredible market share considering their near non-existent
advertising campaign until just recently. It is well known that Apple has been spending huge volumes of
money on advertising since the 1970’s.
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Plan of Action
1. Develop a brand name that reflects a new trendy image
2. Design devices (phones) under new brand name (research and development)
3. Identify new consumer target market (refer to pg.8-9)
4. Build an aggressive ad campaign catering to our identified consumer markets
5. Analyzing the success of the new brand (marketing penetration, product development, sales)
Course concepts
1. We used the product life cycle concept to establish that RIM is in the maturity stage and is, therefore,
required to diversify brands and models in order to continue growth.
2. Product assortment- We used this strategy to identify the need to increase product line breadth. This
strategy was essential for targeting our new consumer market.
3. Value of branding concept- We used this concept to identify the importance of brand value, loyalty,
protection from competition and marketing costs.
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Appendix A
Brief history of BlackBerry
o 1998 - RIM produced its first BlackBerry, “a wireless handheld computer”.
o 1999 – RIM is listed on the NASDAQ exchange. Raised $250 million for BlackBerry technology.
o 1999 – BlackBerry 850 Wireless Handheld was introduced: e-mail, wireless data networks,
QWERY keyboard function.
o 2004 - BlackBerry surpasses one million subscribers worldwide.
o 2007 – BlackBerry surpasses ten million subscribers.
BlackBerry vs. iPhone
Sales (as of same calendar quarter in 2008): BlackBerry - ~5.4-6.1 million units
iPhone – 6.9 million units (McLean, 2008)
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iPhone
The iPhone audience is age-diverse: a device this powerful isn’t just for kids. There are roughly as many
iPhone users 55 and older as there are 13-24. The iPhone has brought a new dynamic to mobile computing.
iPhone sales have grown 500% each year since its inception and just in this last quarter (Q2 2009) its market
share compared to other smartphones grew 375%. (A, 2009)
(Zeiler, 2009)
This graph shows that BlackBerry surpassed search queries for “iPhone,” “Nokia N96,” “Sony Ericsson C905,” and
“Samsung Omnia.” Searches for “BlackBerry Storm” have skyrocketed in just a month’s time, bringing the Storm
from the bottom of the search-rankings to the top in no time flat. This tells that in the recent times, as of searching
queries, BlackBerry has been gradually taking over their biggest competition – the iphone. (Zeiler, 2009)
Things that consumer dislike about the BlackBerry: (Zeiler, 2009)
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Customers’ dislikes about the BlackBerry were more varied. They disliked the Internet browser (13 percent) most,
followed by the keypad (11 percent) and application problems (10 percent).
Cellphone statisfaction Ratings:
(Zeiler, 2009)
Apple once again led in customer satisfaction with 79 percent of iPhone owners saying they were “very satisfied.”
That’s up from 72 percent in December, but almost identical to Apple’s rating in the June 2008 and March 2008
surveys. RIM fell two points to 50 percent. RIM had a 54 percent rating in both the June and March surveys last
year.
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Works Cited
Campbell, C. (2009). Is The iPhone Killing RIM? Maclean’s. Retrieved October 18, 2009 from http://0search.ebscohost.com.innopac.lib.bcit.ca/login.aspx?direct=true&db=bth&AN=43903884&site=bsi-live.
CBR. (2008) Research In Motion Limited retrieved October 18, 2009 from
http://www.cbronline.com/companies/research_in_motion_limited.
Custom iPhone Apps Available! Retrieved October 16, 2009 from
http://www.projecta.com/News.asp?NewsID=236
Datamonitor Plc. (2009). Research in Motion Limited. Retrieved October 16, 2009 from http://0search.ebscohost.com.innopac.lib.bcit.ca/login.aspx?direct=true&db=bth&AN=41977079&site=bsi-live.
Hesseldahl, A. (September, 2008). BlackBerry vs. iPhone: RIM Takes It Up a Notch. BusinessWeek
Online. Retrieved October 19, 2009 fromhttp://0search.ebscohost.com.innopac.lib.bcit.ca/login.aspx?direct=true&db=bth&AN=34385381&site=bsi-live.
Hesseldahl, A. (September, 2009). RIM Results Raise Growth Fears. BusinessWeek Online. Retrieved
October 19, 2009 from http://0search.ebscohost.com.innopac.lib.bcit.ca/login.aspx?direct=true&db=bth&AN=44382411&site=bsi-live.
In Depth: Research in Motion. (June, 2008). Retrieved October 16, 2009 from
http://www.cbc.ca/news/background/rim/
Ipsos. (2008). Developing Markets Driving Demand For Mobile Devices. Retrieved October 17, 2009
from http://www.ipsos-na.com/news/pressrelease.cfm?id=3982.
McLean, Prince. (October, 2008). Apple iPhone 3G Sales Ssurpass RIM's Blackberry. Retrieved October
16, 2009 from
http://www.appleinsider.com/articles/08/10/21/apple_iphone_3g_sales_surpass_rims_blackberry.html
TelecomWeb News Break. (April, 2009). RIM Launches BlackBerry Apps Store. Retrieved October 18,
2009 from http://0search.ebscohost.com.innopac.lib.bcit.ca/login.aspx?direct=true&db=bth&AN=39565018&site=bsi-live.
Research In Motion Limited1, (2009). BlackBerry Security-Wireless Network Security For Corporate
Data. Retrieved October 19, 2009 from http://na.blackberry.com/eng/ataglance/security/.
Research In Motion Limited2, (2009). Company-Research in Motion. Retrieved October 19, 2009 from
http://www.rim.com/company/index.shtml.
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Zeiler, David. (April, 2009). Palm Pre won’t hurt Apple; BlackBerry, iPhone Rule Smartphone Kingdom.
Retrieved October 16, 2009 from,
http://images.google.ca/imgres?imgurl=http://weblogs.baltimoresun.com/business/appleaday/blog/topblackberry
dislikes.gif&imgrefurl=http://weblogs.baltimoresun.com/business/appleaday/blog/iphone/&usg=__sV6Fe
vuH0VUnBs8VOnmcXBzAX8=&h=300&w=450&sz=8&hl=en&start=1&um=1&tbnid=F_b3yllYTsf2oM:&tbn
h=85&tbnw=127&prev=/images%3Fq%3Dblackberry%2Bstatistics%26hl%3Den%26rlz%3D1T4ADBS
_enCA286CA288%26sa%3DN%26um%3D1
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