Case Study 1 Blackberry’s Rise in Brand Power The Dueling Marketing Strategies of RIM versus Apple Team C Trevor Cameron Ralph Nocos Matthew Bennett Bobby Sidhu Christiane Abboud Tina Lee Problem: What product strategies does RIM need to make in order to dominate the Smartphone marketplace with Apple being its competitor? Key Findings: The Evolution of the BlackBerry: Note: This timeline provides a basic skeletal illustration of the BlackBerry’s evolution. Only specific models were chosen to demonstrate innovative changes in product features introduced by RIM. (1999) 850 RIM launches their first portable mobile e-mail machine, aimed at business professionals. (Still not a Blackberry-branded handset) Wireless Email Corporate Data Access Organizer Wireless Calendar Wireless Internet Paging (2000) 857/957 RIM signs agreements with Rogers AT&T wireless, Motient, AOL, BT Cellnet, SkyTel, OneMain.com, Bell Mobility, Microbell, Group Telecom and Earthlink. They also form alliances with Compaq, Nortel, Bid.com, Open Text, QUALCOMM, Aether Systems, OracleMobile, Certicom, Brience, Information Builders and Go America. (Still not a Blackberry-branded handset) Wireless Email Corporate Data Access Organizer Wireless Calendar Wireless Internet Paging 5810/6710 (2002) RIM introduces first BlackBerry-branded phone. Email Phone and SMS Corporate Data Access Organizer Wireless Internet BlackBerry Internet Service Instant Messaging BlackBerry Messenger 7230 (2003) First Colour screen BlackBerry introduced. Email Phone and SMS Corporate Data Access** Organizer Wireless Internet BlackBerry Messenger*** 7270 (2004) BlackBerry’s becoming increasingly technologically advance. The 7270 became the first model to carry Wi-Fi and even worked as a VolP phone through corporate networks. There were about 2 million worldwide BlackBerry subscribers at this time. The company also introduced the SureType keyboard, a QWERTY keyboard merged with a traditional phone’s numbers keys, in their 7100 model. · · · · · · Email SIP-based IP telephony Corporate Data Access* Organizer Wireless Internet BlackBerry® Messenger 8700 (2005) RIM expanded their target market to include non-business consumers. The 8700 model became the first BlackBerry marketed to fashion-conscious consumers. Meanwhile, RIM promoted BlackBerry software to other phone brands (Sony Ericsson, Nokia, HTC, Palm and Siemens) to attract potential consumers. Wireless email Organizer Browser Phone Corporate data access SMS MMS Wireless Calendar 8100 (2006) RIM launched BlackBerry Pearl to further market themselves to non-business consumers. The new phone features a candy-bar shape, a light-up trackball, and a 1.3 megapixel camera. Wireless email Organizer Browser Phone Camera Video recording BlackBerry Maps Media Player Coporate Data Access SMS MMS GPS 8300 (2007) RIM introduced the Curve, aimed at both business professionals and the general public. It is the thinnest Blackberry and lightest Blackberry with a QWERTY keyboard. The Curve was the first BlackBerry to boast a 2 megapixel camera. Wireless email Organizer Browser Phone Camera Video recording BlackBerry Maps Media Player Coporate Data Access SMS MMS GPS Push to Talk (PTT) BlackBerry Storm (2008) The Storm is RIM’s first touchscreen handset, introducing a new operating system, a new BlackBerry Application Centre, and a new competitor to Apple’s iphone. Wi-Fi® Enabled 3.2 MP Digital Camera Video Camera Capabilities Supports BlackBerry App World Bluetooth® Enabled Multimedia Player SMS/MMS Wireless Email Organizer Browser Phone Corporate Data Access As illustrated by the timeline above, RIM introduced its first handheld mobile device as a product for business professionals. However, they later diversified their product features to create handsets suitable for the general public as well. This expansion of target market will certainly increase their number of subscribers and sales, but Apple’s iphone remains a steady competitor in the Smartphone market. Apple has an extensive line of creative media products, bringing in billions of dollars in sales to the company. In the past, RIM had mainly focused on providing products to business professionals. How will RIM penetrate the consumer-led market that Apple has dominated over years of providing appealing products to the general public? SWOT Analysis: Strengths: Best features: o Tiny QWERTY keyboard and e-mail service, which make it better for mobile communication and e-mails, notes or scripts, and instant messages o Super useful BlackBerry Messenger (allows users to connect with each other and chat in real time anywhere in the world at no extra cost) BlackBerry is by far the most secure platform in the Smartphone market; many organizations have turned to it to ensure the protection of their most valuable information. Battery lasts longer and you can remove and replace it with a spare when it runs out Removable memory cards feature that gives the BlackBerry an advantage over the iPhone is that depending on your rate plan, you can connect it to your computer and use it as a modem to get online Weaknesses: Sometimes takes too long to load mobile Web sites Newer model Blackberries now support HTML mail, just like the iPhone, however, the iPhone does a better job of displaying HTML email(it looks much like it does on a browser or a desktop) long messages are cut and you have to wait to download the rest of the message If there are images within the body of the email, you’re obliged to download those, too(On the iPhone, it’s all right there on the screen once you open a message) Without a memory card, if you snap a couple of pictures and shoot some video, your memory on BlackBerry will be shot. Downloading five or ten apps will sometimes eat up every last usable kilobyte of memory on the BlackBerry Opportunities: RIM has the opportunity to service the consumer market with fun and innovative applications RIM is the one of the fastest growing company in the world which makes it a well known and trusted company Global brand (92 % of its revenue come from outside Canada) People trust and love Blackberry calling it “Crackberry” Has a product development and diversification strategy* Threats: New competitors are joining the market with similar product( Palm ,Sony…) Competitive Analysis: The Apple Iphone 3G is a direct competitor to the Blackberry storm. Both products are offering similar features, such as mobile phone ,e-mail, organizer, internet device ,GPS ,music and movie entertainment RIM has advantage over Apple that will forever be stuck in a consumer market (it’s easier to shift from enterprise to consumer, versus the other way around) As an all-day communications tool, the BlackBerry beats the iPhone. (There are many different ways to stay in touch with people) with a physical keyboard, many people can write e-mails, text messages and instant messages much faster than on the iPhone’s virtual keyboard Blackberry cost less On the iPhone, you have to manually select each message in order to file them away or delete them. Best iPhone’s features: o Multimedia capabilities and ability to run more than 85,000 apps compared to 2,000 apps for BlackBerry o More able to change easily from one activity to another or able to be used for many different purposes that can eliminate the need to carry other devices. o Easier to use without opening the manual or searching for help Target Market includes: Students who need an easy to use and versatile phone on the go. Professionals who must record and send information. Entrepreneurs who must access web information and keep in contact with business partners. Alternative 1 Expanding Rims target market from Professionals to Include Students and Entrepreneurs. Promote campaigns to attract Students, Professionals and Entrepreneurs including commercials and posters at college campuses and coffee shops in heavy populated areas. The Apple I-Phone is in direct competition with the Blackberry Storm and to capture more of that market we must be relevant, cutting edge and hip. To accomplish this we must run commercials that feature new music that entices people between the ages of 18 to 27. Expanding Business in Canada from a level of 8% revenues to 12% in the next fiscal year. Rim is currently experiencing exponential growth from 1250 employees in 2001 to 7000 in 2009. The growth of Rim across the globe is a precursor for expansion. This is the time for Rim to establish itself as the Leader of the mobile electronics movement in Canada. For the 6 month period ended August 29th 2009, Rims Revenues has reached $6949202. During this period cost of sales were $3,903,281 and gross margin $3,045,921. Advantages: Increase business revenues in Canada will provide a means for company growth. Capitalize on a large and growing new Market. Disadvantages: Risk and Operating Costs associated with implementing a new market strategy. Market Share stays the same, with no gain in clients. Alternative 2 Add Desktop / Web Storefront Access and Application Availability Like the iPone users, BlackBerry users should also be able to access a Desktop version of App World right from the web. Each device has a PIN, and users have email addresses so use both to manage a web accessible App World. If the user changes devices, they can log in and update that information online using the email address they registered. If they change email addresses, they can log in and manage that in their App World account. Some applications are still not available on App World. After App World’s launch, Facebook was nowhere to be found and that is one of BlackBerry’s most popular applications. Sure it was added, and remains in the top 10 BlackBerry App World Apps but it wasn’t there on launch, and many other popular BlackBerry applications remain nowhere to be found on App World. You won’t find UberTwitter on App World. If you do a search for BlackBerry Twitter clients, you won’t see TwitterBerry either. Too many BlackBerry apps rely on the user to go to the developer’s own site to download wirelessly and completely bypassing BlackBerry App World. If they want to capture their target market, they would have to get on top of this issue and start adding these popular applications. Advantages: 1. Customers can browse apps from their desktops so they can more easily read the reviews, then choose to download / install the apps they need. 2. Making the popular apps available for blackberry users will definitely increase their target market. 3. Blackberry can persuade potential customers who thought about switching to blackberry but found out that they dont carry the popular apps. Disadvantages: 1. Licensing issues might occur. 2. Customers might not have the time to update their online information to manage their App World account. 3. Inaccurate information might affect payment methods for online purchasing of Apps. Alternative 3 Attracting global segments Evidence supports that RIM only has a small market share in North America. While growing its business in North America is a major objective for RIM, it is still only a small portion of what is available worldwide for the company. If Blackberry wants to remain a strong competitor to Apples Iphone it must capture as much of the market as possible. Even though North America is a dominant market prospect, all resources cannot be allocated to capture a small percentage of available market segments. RIM can focus some resources on penetrating the market in North America, however, it must also think of the bigger picture at hand, only a small percentage of people live in North America versus the world. More of an effort must be focused on attracting new and different segments from different parts of the world. As the rest of the world recognizes RIM and BlackBerry as a successful product and company the easier it will be to penetrate the North American market. Advantages: 1. More opportunities to grow as a business. 2. The brand RIM/BlackBerry would be recognized a lot more than if just focused on penetrating North America’s market. 3. Able to achieve a greater chance to grow due to more users around the world. Disadvantages: 1. Competitors could have already allocated resources to potential new segments. 2. Newer products available, for cheaper. 3. Cannot penetrate Solution: In increasing the processing speed and the easy to use philosophy will make the BlackBerry a strong competitor of Apples Iphone. The size issue is always a concern, smaller faster and easier to use is the main goal for any company wanting to penetrate into certain markets. Upgrading the product and making sure those customers feel that the product is a sound and safe investment, will go above and beyond the competition making RIM/BlackBerry one step ahead of the competition. Having more than one model to choose from, gives the customer the choice, giving them the impression that RIM/BlackBerry is catering to their needs. To grow BlackBerry’s market share they must market the product to new segments while continuing to keep a strong relationship with customers that already use the product. BlackBerry is a leader in personalized communication equipment, and to continue their overall success, it must advance the capabilities of its technology while continuing to make its customers their number one priority.There are many things which can be done by the head office at Blackberry to assist the future growth of this flourishing company. As stated in the marketing strategies section, we have ideas to change the way the world today looks at the Blackberry. Implementation We will begin with significant changes to the Marketing Mix: Product, place, price, and promotion. Product: Blackberry is a company which has always had a top of line product, and has never failed to hold up its reputation when it comes to the world of cellular phones. However, recently they have fallen in the shadow of their direct competitor, the Apple I-phone. There are a numerous amount of things which can be done to compete on a higher level with the rivals. Some of these changes would include changes in size, weight, and processor speed. A tactic which would have to be put in place would be to arrange a meeting with the distribution plants and engineers so that they have an idea of what needs to be done and when it needs to be accomplished. Action must be taken immediately, and this finished product should be competing very aggressively with its rival competitors. Place (Value Delivery): Once the new Blackberry Storm has been updated and all of the requirements have been met, we can begin to make the product readily accessible to when and where the target market will most likely make a purchase. As mentioned in the strategies components, only 8% of our business is in located in Canada. To become more adverse, we have to begin at the small distributors and work our way to the markets which extend across the nation and to super-store retailers such as Wal-Mart. Extending an invitation to these stores will not only boost our profits and advertising, but will also show that we are not just a secluded product and can be available to the everyday shopper. Price: A key to success within our organization would be to charge a price that customers perceive as giving them a good value for the cellular product which they purchase. Three key types of pricing must be practiced, cost-based pricing competitor-based parking strategy and value based pricing. Cost-based pricing: Blackberry would have to determine the costs of producing the new changes to the Storm, and then add a fixed amount (reasonable price) above the total so that we can finally come up with a prime selling price. The pricing for the Blackberry Storm should be within range of its competitor, and also have extra incentive for the consumer to purchase the product. Offering free data and cheaper contracts may attract a new and broader market within our country and others all around the world, giving the consumer a chance to see what the Blackberry experience is all about. Competitor-based parking strategy: In order to compete with rival Apple I-phone, Blackberry will have to set a price which is either below or above Apple. In this current situation, Blackberry would be greatly benefitted by marking their price down, allowing for people who could not afford the product before to give it a try. Value based pricing: This is a very smart technique and is what needs to be done in order for Blackberry to successfully set a price to run against their competition. Our company would have to check the demographics of the consumers who are buying our product and compare them against our rivals to see where they are beating us. This valued information can lead Blackberry to make changes in its fixed price to insure that the finished product is a financially accessible by the desired consumers. Promotion: Before any sort of advertisement or promotion can occur, Blackberry must make sure that they understand their consumers and value their needs above everything else. Once this information has been collected, Blackberry can begin to communicate to their target market by producing a vast diversity of media advertisement through television, radio, magazines, sales promotions, public figures, sales force, and the internet. Currently, Blackberry has a solid marketing and promotional campaign going on, but does not match the hype of its competitor Apple. One of the things, which Blackberry must do, is obtain an influential character, which is relevant to people of all statures. Once a key person of interest is decided upon, there should be commercials, which follow, and an advertising campaign, which state the goals of our company and shows the people that we are there for them, and that they are our number one priority. A tactical plan, which will be put in place, will be to hire a new commercial agency, which focuses more on the younger generation of today versus the business cliental. This will be a large stepping-stone and has been on the to do list for Blackberry for a while now. After all of this has been completed, the new commercials and advertising will take our market to a whole new level. Implementing: Once the marketing mix has been completed, Blackberry must allocate the resources needed to put this plan into action. So first, we would have to develop a budget, making a calendar of specific dates and tasks to be completed, and finally having teams draw up the marketing strategies and plans. Once this stage has been reached, the Blackberry managers will have to figure out how much of their time and money will be spent on perfecting the new updated Blackberry Storm, versus time spent on other products such as the Curve and Bold. Once all of this has been completed, the product will be available for release. Plan B Controlling the majority of the market share in any given place at any given time is almost impossible to do. In BlackBerry’s case it is focusing on making a push to try and compete with the relative market share of Apples Iphone. In the world today there are more than 6.8 billion people while in North America there are only 500 million. That is only 7.35% of the world’s population lives in North America. There is no problem with trying to capture a piece of the market share in North America however time spent on marketing the product to the remaining 92.65% of people would lead to a greater success in the long run. As the world recognizes RIM/BlackBerry as a Number one product/supplier, North America will soon follow. Course Concepts: Growth Strategies: Product Development, RIM has the opportunity to offer a new service to their current target market. They can accomplish this by allowing their customers to purchase Applications for their Blackberry not only from their phones, but from their computers as well. Market Share: In North America RIM only has a small market share compared to what is available. Market Segments: All resources cannot be allocated to capture a small percentage of available market segments Relative Market Share: BlackBerry is focusing on trying to compete with the relative market share of Apples Iphone. Diversification strategy: RIM introduces and works on producing new products and services to satisfy its target market. Additional Sources: http://www.blackberry.com/ http://www.blackberrycool.com/2009/07/14/study-exposes-flaws-in-iphone-and-strengths-in-blackberry/ http://www.electricpig.co.uk/2008/10/08/evolution-of-blackberry-thunder-how-did-we-get-here/