Blackberry’s rise in Brand Power
RIM versus Apple
No Name Team
Christine Bhatt, Matthew Yarrow, Maylene Su, Carson Cheung, Gina Ceradli, Stephanie Gosel
MGKT 1102
FMGT Set 1B
Jeff Collier
Introduction:
RIM and Apple have been in competition to see who can win the battle of brand dominance.
Apple has the iphone while RIM has their line of Blackberries. In past years the IPhone sale
numbers have been able to surpass the Blackberry numbers. How can RIM increase their sales
numbers and win the battle of brand dominance.
Problems:
 How will RIM successfully win brand dominance in the mobile Smartphone market
place?
 What product strategies will they need to:
o adapt to new technology,
o changing consumer behaviour
o and increase competition?
 What plan/ strategy will help RIM grow their market share in North America and in the
Global Market place
Key Findings:
 92% of RIM’s revenue come from outside of Canada
 14 million people use the product in over 135 countries
 Execs want to increase market share, raise stock prices
 Dominate other competitors like Sony, Microsoft, Palm, and HP
 They help put Canada above US
Assumptions:
 The number of employees will continue to grow as they expand
 They are a “global brand”
 They have loyal customers/ consumers
 RIM is continuing to put out new phones
 Continuing to improve their features
o Mobile phone
o E-mail
o Organizer
o Internet device
o GPS
o Music
o And movie entertainment
 They will branch out their target market
SWOT Analysis:
Strength
- RIM introduced the blackberry line in 1998, making it better known and recognized than the
Iphone. Being well recognized gives RIM a well established platform for future products and
innovations.
-The blackberry has a high level of security. Having this high level of security, it appeals to
many people to value their privacy. Especially to the target market of business people. This
security level appeals to different market; the most well known market this security level has
brought to the company has been celebrities.
Weaknesses
-Because the blackberry has been around for so long, it has stereotypical image. Originally the
blackberry was marketed to business people, which set the image to other consumers that the
blackberry would only benefit that one specific market.
-Cost of phone and plan because the blackberry has so many features connected to the
internet, people believe that not only is the phone expensive, but so is the plan that comes with
it. They believe they need to pay extra for the features such as data and instant messaging
usage.
Opportunities
-Can the opportunity to introduce new services that are compatible to the blackberry line. For
example, RIM can follow Apple and introduce an application store specifically for the
blackberry line.
-Can expand into different markets. RIM can break the stereotypical image that blackberries
are only for business people and introduce phones that appeal to other markets.
Threats
-Other companies like Apple and Sony are already established in various markets, while RIM is
only well established in one market.
-Because RIM is technically one step behind other companies in expansion. Once RIM starts
expanding, other companies will begin to expand into the business market, causing more
competition for RIM.
Competitive Analysis:
In the battle of smart phone dominance we have the following competitors: RIM, Apple, Sony,
and Palm. Each company focuses on a different target markets but all compete to have brand
dominance.
The companies have produced new products in order to help win the battle of brand
dominance
Apple-Introduced the 3G Iphone
RIM-Blackberry Storm
Palm-The new Palm Pre
Sony-Ericson Line
Currently the greatest threat RIM faces is the Apple 3G Iphone.
When first introduced the 3G Iphone took dominance over the smart phone battle. But recent
studies show that the blackberry is slowly surpassing Iphone sale numbers, while destroying
sale number of the Palm Pre. As shown in the graph below.
Although new versions of the Iphone have shown similar features to those featured on the
Blackberry, we can see in the following graph that RIM is sending out a significantly larger
number of shipments than Apple is sending out with their Iphone.
When looking at the price comparison between the 3G Iphone and a Blackberry Bold they are
quite similar in price. A blackberry would cost about $199 which is the same price for an 8GB
Iphone. But a 16GB Iphone can cost as much as $299. So when dealing with price both Apple
and RIM are on an even playing level as they promote similar prices for their phones.
Target Market:
Traditionally, Blackberry phones have been targeted to business professionals only.
They were not priced or developed for the everyday cell phone user. Considering RIM's firm
lead in the business market, it seems the next significant step for continued growth would be
the consumer market. Its largest competition in the consumer market has been coming from
Apple's iPhone. RIM has attempted to break into the consumer market, with the releases of its
Pearl and Curve devices. The reason for this is that the technology powering RIM's data
offerings has improved dramatically over the years, resulting in a much more efficient
operation than was possible before. This, in turn, has enabled both handset manufacturers and
wireless carriers to lower costs, making the BlackBerry more affordable to the average
consumer. Blackberry has made a push with the younger generation by capturing style and
function. The U.S. is the single largest of RIM's markets, accounting for over half of total sales.
As with Canada, however, the U.S.'s share of RIM's revenue has been decreasing steadily over
the past couple of years. New, emerging markets are responsible for much of RIM's recent
sales growth. The percentage of RIM's revenues coming from countries other than Canada and
the U.S. has grown significantly. Whereas the BlackBerry has already achieved significant
market penetration in RIM's two primary markets, its smaller presence in other markets leaves
much room for growth. Several of these markets have been experiencing periods of rapid
growth themselves, spurring an increase in the demand for high-end PDAs and mobile phones.
For example, RIM recently entered into a partnership with China mobile to sell its popular
BlackBerry smart phone in China. Also, Russian mobile firms MTS and Vimpelcom will also be
selling Blackberry phones and servicing corporate clients.
Recommendations:
Alternative 1: Product Development Plan
Apple does have some extra features that RIM does not yet offer. One main feature being the
ITunes store. An online store where apple customers can easily download music and
application of their apple products. RIM can introduce an online feature similar to the Apple
ITunes store. The store application can be built into blackberries for convenience, as well as
being easily accessible from a computer. The store can offer application and music downloads
for all blackberries.
Advantages
Attracts consumers that use the Blackberry
for convenience
Increases company profits-profits from
applications can go straight to company
revenue.
Having the application store already installed
in the phone-makes the store easily accessible
to all blackberry users.
Disadvantages
Won’t be able to offer the same amount of
applications as Apple, so RIM might have to
come up with application they could offer to
Blackberry users.
Might not see the same success as the ITunes
store. The ITunes store has a main focus of
downloading music easily; RIM might not be
able to come up with a main focus as strong as
that.
Apple offers a wide variety of applications
(games, Google maps, calendar ECT.); their
products revolve around the variety of
application available for them. RIM has not
based their products around that same aspect,
which might take away the ability to have
such a wide variety of applications.
Alternative 2: Differentiated Segmentation Strategy
Currently the RIM blackberries are seen has smart phones. Most people see them as phones
which would benefit only business people. RIM can get rid of that belief by promoting the
blackberry to different target markets. Showing how the blackberry could benefit any type of
person, not just business people.
Advantages
Get rid of the belief that the blackberry can
only benefit one specific type of market.
RIM would be able to expand their market
segments
By increasing clientele RIM would have the
ability to possibly increase their product
development plan. By having more target
market they could possibly make more
applications for their store.
Disadvantages
The company’s marketing and advertising
expenses increase
Marketers would need to come up with new
ideas on how the blackberry would benefit
other market segments and how they would
promote that.
Marketers would need to figure out new
target markets to promote their product to.
Alternative 3: Diversification Strategy/Market Segmentation
Some people believe that because the Blackberry have so many extra features like email and
GPS they need to include these features in their cell phone plan. Which can scare some people
away because they might think this would increase the cost of their monthly phone bill. RIM
can create phones that could that limit the amount of extra features that are included with the
phone. For example, a student could believe because the blackberry offers email they would
need to pay for this service in the phone bill, but by offering a blackberry that does not have
this feature it could attract this student into buying a blackberry. By doing this RIM could
increase target markets and create new target segments.
Advantages
Able to promote new products to new
consumer segmentations
Could cut the expenses that are created from
creating features like email and Google maps.
By cutting features from blackberries it could
increase the efficiently in which the
blackberries are made.
Disadvantages
Creating new products can create new
expenses for the company
Need to do some market research to figure out
what features could make the blackberry
seem unnecessary to some people
Creating new products can create new market
segments which could entail additional
marketing and promotional expenses.
Solution
Alternative 1+Alternative 3:
RIM can create simpler versions of blackberries that have limited features, which would be less
costly for consumers who just want a functional phone. By doing this RIM could increase target
markets and create new target segments. But there are always those consumers with the
original blackberries who want more features and applications, and also those with the simpler
versions of the blackberry but later on changed their mind to become the former group of
consumers. And so, RIM can also introduce an online store application, which can be built into
blackberries for convenience and also accessible on the internet. The store can offer
application and music downloads for all blackberries.
Advantages
Disadvantages
Attracts consumers who use the Blackberry for Fewer applications than apple, so RIM has to
convenience and also those who just want a
build new applications, which can create new
simple phone. (new consumer segmentations) expenses. Also need to do some market research
to figure out what features and applications are
necessary or unnecessary to consumers.
Increases production efficiency and company
profits from selling applications online instead
of including them into the phone as a package.
Additional marketing and promotional expenses,
for a product with an uncertain future, to
compete with the already successful ITunes
Store.
Having the application store already installed in Unlike Apple, RIM has not based their products
the phone makes it easily accessible to all users. around a variety of applications, so it would be
difficult to start doing so.
Implementation Plan
1.
2.
Design and develop a phone with less features. (develop the idea)
Concept testing – Statement describes the product and service and is presented to potential
buyers or users.
3.
Analyze reactions of target market representation
4.
Develop a prototype – physical form or service description - based on research findings from
concept testing
5.
Alpha testing – RIM determines whether the phone and application store will perform
according to its design and satisfy the need that it was intended for.
6.
Beta testing – have potential consumers examine the phone and application store. Determine
its functionality,
7.
Premarket tests – determine how many customers will try and then continue to use the
phone and the application store.
8.
Test marketing – Introduce the application store and new blackberry phone to a limited
geographical area before a national launch.
9.
Product launch – introduce the product to the entire market
10. Promotion – test results help RIM determine an appropriate marketing strategy
11. Place – make sure an adequate quantity of the phones are available for shipment and kept in
stock at stores. Ensure that the online application store is constantly functioning properly.
12. Price – offer a higher price and add promotions.
13. Timing – ensure the launch of the phone and application store is done when it would be most
noticed by the target market.
Plan B
If by chance the desired solution does not work or cannot be implemented, RIM should
continue on with market development – expanding into new markets with existing products –
to grow their markets share.
One way in which the market development can be expanded is to increase the
perceived value (the relationship between a product or service’s benefits and its costs).
Perceived value can be increased by making the sustainable competitive advantage (something
the firm can persistently do better than its competitors) known. Also, new ideas can be
marketed to cover a larger spectrum of people.
By making the sustainable competitive advantage known and RIM is increasing their
value by creating a comparison of their product to another product. They promote what they
can do just as well as the next leading brand/product and also offer what they do better. By
doing this, RIM is retaining their old consumer market while appealing to a newer one. This in
turn solidifies a consumer’s view on the blackberry as being a better brand.
As mentioned above, the blackberry is seen as being a phone for the people of the
business world. By promoting the blackberry from a different angle, while keeping the product
the same not only keeps the costs constant, but expands the blackberries availability into
different markets. In general, many consumers now choose to do things and purchase objects
which fulfill their self concept and make them happy. If the majority of the population views
themselves or would like to view themselves as fun and social then the blackberry should be
promoting those views. RIM can therefore promote their facebook application, or networking
options such as BBM which would then in turn appeal to the population who share the common
views.
To recapitulate, RIM does not need to completely change their product, or add a new
line of products to increase their market development. Instead to increase their target market,
they can increase value by promoting new ideas or old ideas in a different way to appeal to the
new market.
Course Concepts
SWOT (Strengths, Weaknesses,
Opportunities, Threats)
STP (Segmentation, Targeting, Positioning)
Market Segmentation
Market Penetration Strategy
Product Development Strategy
Alpha Testing
Beta Testing
Premarket Tests
Test Marketing
Product Launch
Promotion
Place
Diversification Strategy
Need Recognition
Branding
Packaging
Concept Testing
Protype
Price
Timing
Product Development Plan
Market Segmentation
Diversification Strategy
Differentiated Segmentation Strategy
Target Segments
References
http://www.wikinvest.com/stock/Research_in_Motion_(RIMM)
http://seekingalpha.com/article/113850-blackberry-vs-iphone-the-smart-phone-battle-rages-on
http://aaplinvestors.net/wp-content/themes/revolution-20/investorimages/iPhoneBBShip.jpg
Marketing Canadian Edition, Grewal, Levy, Persaud, Lichti.