RIMCaseStudy - ZEN Portfolios

Marketing 1102, Set C – Team B
RIM/BlackBerry Case Study
Jeremy Flewelling
May Nguyen
Dianne Stebner
Robin Buntain
Derek Fenton
Tyler Boe
Elicia Peterson
Research In Motion was founded in Waterloo, Canada in 1984 and launched their
signature product, the BlackBerry Smartphone in 1998.1 Since then BlackBerry has established
exceptional brand power and awareness. They have achieved global recognition, and one third of
subscribers are from outside of Canada.2 BlackBerry has historically focused the majority of its
advertising and promotion towards its enterprise/corporate user target market, and has enjoyed
the success of this for years. Through this, it has established strong brand loyalty and dominance
amongst this group. For example, the US Congress remains the top customer, with more than
500,000 devices installed in each government department.3 The top four companies also possess
around 100,000 users.3 However, their competitors, namely Sony Ericsson, Nokia, Palm, Apple,
and HTC, actively pursue the consumer target market, utilizing media features such as
applications, music, videos and games. In 2006, paid mobile phone media content totaled $31
billion globally.4 RIM recently released some disappointing results, as their shares tumbled
15%.5 With the increasing competition of consumer-orientated smartphones, BlackBerry needs
to come up with a product development strategy and/or a market penetration strategy to draw in a
stronger base of these consumer customers and gain market share.
1. Blackberry Website http://www.rim.com/company/index.shtml
2. http://www.123jump.com/earnings-calls/Research-In-Motion-Ltd./32293/
3. Scribd – Blackberry Nation http://www.scribd.com/doc/19651370/Sweeny-BlackberryPlanet-The-Story-of-Research-in-Motion-and-the-Little-Device-that-Took-the-World-byStorm-EBook-sample
4. Wikipedia http://en.wikipedia.org/wiki/Mobile_phone
5. http://www.123jump.com/earnings-calls/Research-In-Motion-Ltd./32293/
How can Blackberry gain market share in the consumer market while sustaining its current
competitive advantage in the corporate market?
Facts Relating to the Problem
RIM ‘s stock dropped 15% on September 25, 2009.
Source: http://www.google.com/finance?q=rim
Apple Iphone has over 50,000 mobile applications while blackberry only has 1000+
Majority of users find the Iphone easier to use
Internet Browsing slower than their main competition (Iphone)
I Phone beat out Blackberry 803 to 724, on a 1000-point scale in a Consumer satisfaction.
The factors that contributed to this study were: ease of operation (29 %), operating
system (23%), features (16%) and battery function (11%).
Media Player/Music player no comparison to competition
Blackberry’s CPU (central processing unit) and RAM have been insufficient relative to
its competitors until just recently, where the Blackberry 8900 have 600mhz CPU and
256MB of RAM, still lower than that of the Iphone.
Source: http://en.wikipedia.org/wiki/Iphone,
Consumer Satisfaction
RIM Stock
Target Market
Blackberry user appeal has come largely from business professionals and executives. The
U.S. Congress remains as the top customer, with more than 500,000 devices installed in each
government department. The top four companies also possess around 100,000 users.
We want to target blackberry to the younger generation of consumers, from ages 16 to 34.
SWOT Analysis
Strong Brand Equity: RIM has successfully developed a loyal customer base and has
achieved powerful brand recognition. The RIM brand value in 2009 is worth 27.5 billion and
is ranked #16 on top 100-brand list.
Innovation: RIM was the first company to realize and fulfill the need for a fully
comprehensive, mobile communications device. RIM continues to offer a leading selection
of products, software and services including its very own BlackBerry Enterprise Server,
which relays emails back and forth between BlackBerry users.
High Cost of Ownership: Blackberry products are typically more expensive than its
competitors’. Consequently many consumers perceive BlackBerries to be high-end goods
that are not cost-effective and will opt for cheaper substitutes.
Consumer Market Share: BlackBerry products are still perceived by many consumers to
simply be business-oriented as was shown by the lackluster fanfare and sales of the recently
introduced “Storm”, BlackBerry’s new smartphone marketed directly towards the consumer
Diversification: RIM still has the opportunity to expand and increase its market share in the
consumer target market through the development of new products and services that suit the
desires of the average retail consumer.
Tougher Competition: With the introduction of new products like the Apple iPhone and
Palm Pre, and the globalization of companies like Apple, RIM is facing its toughest
competition ever. Especially because RIM is in a mature stage of growth, it stands to lose
profits if it doesn’t stay ahead of its emerging competition.
There are no sources in the current document.
There are no sources in the current document.
Alternative 1
To create a better updated version of the Storm model and relaunch it as the Tsunami.
This will feature a dual touch screen and keyboard, to provide a happy medium between the
business orientated keyboard and the consumer appeal of the touch screen. The touch screen will
be emphasized in advertisements geared towards the consumer market segment. The connection
to the Storm will also be emphasized to create the hype that this is a newer, superior product but
still along the same line. It will also provide an updated interface and a sleeker design.
Combines the benefits of both the touch screen and keyboard
Touch screen helps target the consumer segment
Name recognition between Tsunami and Storm will create buzz of an advancement in the
Uses a large portion of the research and development already used for the original Storm,
which saves further time and costs
Associated with Storm, which has had limited success
Still incorporates negative aspects of the Storm
Limited time as Palm Pre has already launched, which uses the dual touch screen and
keyboard approach
Corporate segment may not be interested in touch screen, and consumer segment may not
realize the Tsunami is targeted at them
Alternative 2
Blackberry increases its product depth by introducing a new strategic business unit to
develop and market the new brand BlueBerry. This product line will focus on incorporating
applications, games, videos, and movies and extension of the network to include stores and
databases for these. It is important to still use the existing BlackBerry network or create a new
BlueBerry network as this feature provides a sustainable competitive advantage. This product
advancement and branding repositions the BlackBerry to gain market share in the consumer
segment, and provides an answer to these existing features of the iPhone. This multibranding
strategy will also focus heavily on the style of marketing and advertising campaign, relying on a
fresh, hip, young theme to convey that this is no longer BlackBerry or the culture and corporate
stereotype associated with it.
Multibranding Strategy
BlackBerry executes a brand development strategy called “multibranding.” This is used
when a company introduces additional brands within the same category. RIM started with the
Blackberry and extended the product line with different models. The purpose of introducing an
additional brand, “BlueBerry”, is to appeal to different buying motives (ex. media usage) which
will facilitate further transition into the consumer segment. Also, the name association between
the brands will emphasize the connection with each other and BlueBerry will feed off the
established power of the BlackBerry name. This split in brand names will leave BlackBerry
specifically focused on their existing enterprise/corporate customers, allowing the BlueBerry to
aggressively target the consumers.
Appeals very specifically to the untargeted consumer segment of the market
Incorporates media tools and services while keeping the benefits of BlackBerry network
Creates very clear schism between corporate and consumer use of BlackBerry
Creates buzz of new brand while still remaining obviously synonymous with BlackBerry
Very expensive and time consuming to pursue this strategy
May divert attention and focus from current BlackBerry commitment and cause brand
Risk the loss of existing consumer BlackBerry users because of the emphasis that the
BlackBerry is strictly a business product now
Name, style, and overall appeal so similar that people cannot differentiate between them
Alternative 3
BlackBerry will undergo a rigorous application development process, and launch their
own Application Store to be accessible to all models. It will be pre-installed on all new models,
and can be accessed wirelessly on older models. The applications will vary in price, and can be
paid for on account and downloaded directly to the phone. They will range in use from useful
tools to personal assistance, manuals, knowledge databases, GPS and mapping devices, and
entertainment services. There will also be standard applications pre-installed on the phone.
Reverse engineering on the iPhone can be utilized to better understand and develop the
applications. This will target the primary users of applications, the 16-35 consumer group, and
try and pull some of them over from the iPhone, which dominates the application trend. The
applications will be offered on all models though, as to not alienate our core corporate user
group, and some application development will be geared towards business functions.
Applications specifically attract consumer segment customers
Phone applications create overall convenience and appeal for BlackBerry
Adds iPhone’s main competitive advantage to existing benefits of BlackBerry
Provides basis for creative and aesthetic consumer-driven advertising campaign
Risk of Apple iPhone application notoriety and depth remaining superior
Not everyone likes to add applications to there phone, especially the corporate users
Time consuming to create an extensive portfolio of applications
Apple iPhone applications may hold patents or be subject to copyright infringement laws
With the increasing competition of consumer orientate smartphones, BlackBerry started
shifting themselves as a lifestyle brand in addition to a corporate product. In order to accomplish
a successful transition into the consumer market; a sub-brand (BlueBerry) will be created within
RIM, that is more consumer based. Ads using hip, fun, and stylish themes are being used to
segment the smartphone market and go after the 18-35 consumer target market. This new
product will allow users to download music and applications, play games, and watch movies.
The introduction of applications and media platforms are a definite must to compete with
BlackBerry's main competitor, the Apple iPhone, in the consumer market. These features
increase the appeal of the phone to the 18-35 market and add to the overall lifestyle image
created. Creating a new product line will resonate a shift to the consumer end of the market, and
creating a seperate (associated) brand name will signify the reposition of markets. RIM is a
pioneer in the smart phone industry, but currently BlackBerry is in its mature stage. With all
of its competitors coming out with products such as the iPhone and the Palm Pre, RIM faces
a decline in its profits if the company does not find a way to stay ahead of its competition. This
increase in product line depth, in congruency with the marketing efforts that reflect the change in
target market, will create a needed schism between the corporate brand association of
BlackBerry and the consumer lifestyle view.
Plan of Action
1.) Generation of a new Idea:
•Begin by brainstorming new ideas for a product that will appeal to consumers, rather
than executives.
•The “BlueBerry”
-This product will be similar to the BlackBerry, but have more features
geared towards people ages 16- 35.
-It will be more “fun with a media platform for applications, music and games.
2.) Testing the concept:
•Test the new concept on a carefully selected segment of potential buyers.
-Test subjects will be selected based on their demographics and psychographics.
-Receive feedback from these customers.
-Make adjustment to products based on customers feelings towards the
new phone.
3.) Developing the product:
•Decide on specific technologies, and features the device will have.
•Choose a marketing strategy to be implemented at the time of the phones release.
•Develop a design and prototype of the product.
•Put the prototype through both Alpha and Beta testing to assure it is meets all the
consumers’ needs.
•The device will have a sleek, aesthetically pleasing, and more ergonomic design.
4.) Testing the Market:
•Perform premarket testing with the device to see consumers’ reaction to the product and
its promotion using surveys and questionnaires.
•Release the new device to the small geographical location of New York to see how it
will do in the market.
•Promote the device with TV commercials, radio commercials, posters, sponsors, and
sales offers.
•Promote at schools, malls, and concerts.
•R.I.M. will use ads that show the Blueberry’s style, youth appeal, and excitement.
5.) Launching the Product:
•Determine the proper way to promote the phone to consumers.
•Have the new product readily available at as many locations as possible to make
purchases easy and convenient for new customers. All cell phone companies which
support BlackBerry will now carry the new “BlueBerry.”
•R.I.M must be sure to have an appropriate price for the new phone so that consumers
will be willing to make the purchase.
•The launch must be timed appropriately, perhaps after a few months of hyping the
products up with ads.
6.) Evaluating results:
•R.I.M must pay close attention to the products success or failure.
•If the product fails, it will be extremely important for the company to make changes to
remedy this issue.
Key Concepts
Brainstorming from Chapter 10, is used in our plan of action to generate new ideas to bring to
the market in order to gain more consumers, on page 10.
Branding (Brand association) from Chapter 9, is used in our second alternative solution by
showing how Blackberry will gain more consumers, on page 5.
Brand loyalty from Chapter 9, is used in our introduction enforce the following that Blackberry
has from its consumers, on page 1.
Brand power (Brand Dilution) from Chapter 9, is used in our introduction explaining the
strength behind the Blackberry, on page 1.
Consumer market share from Chapter 1, is used in our SWOT to show how Blackberry’s
market is too small and needs to branch out and provide to the consumer market as well, on page
Demographics from Chapter 8, is used in our plan of action to define what the new market that
Blackberry is going after and what the interests of those people are, on page 10.
Diversification from Chapter 2, is used in our SWOT to establish that Blackberry needs to tap
other markets to create new growth, on page 4.
Innovation from Chapter 10, is used in our SWOT illustrates how RIM has been a leader within
the telecommunication world, on page 4.
Market penetration strategy from Chapter 12, is used in our introduction to establish what our
new marketing plan is to get a larger consumer base, on page 1.
Market segment from Chapter 10, is used in our first alternative solution by connecting the new
Blackberry to the consumer market that we are going after, on page 5.
Mature stage (Product life cycle) from Chapter 10, is used in our solutions portion by accepting
that the Blackberry is in the Mature stage of its product life and that marketers for RIM need to
continue with new market strategies to keep its current consumers, on page 8.
Multibranding from Chapter 9, is used in our second alternative solution by using the
introduction of the ‘Blueberry’ to gain more of the consumer market, on page 6.
Product depth from Chapter 9, is used in our second alternative solution by show casing the
many models that Blackberry makes that diversify the Blackberry product, on page 5.
Product development strategy from Chapter 1, is used in our introduction to focus what the
next step of marketing that Blackberry needs to do in order to gain a larger share of the market,
on page 1.
Product line from Chapter 9, is used in our second alternative solution associating the
Blackberry with business, or professionals in the workplace, on page 6.
Psychographics from Chapter 8, is used in our plan of action to get a better understanding of
what the consumers feel they need in a product, on page 10.
Reverse engineering from Chapter 10, is used in our third alternative solution by having RIM
take apart the iPhone and gaining valuable information on its key selling features, on page 7.
Strong brand equity from Chapter 9, is used in our SWOT to show the strength and quality
associated with Blackberry, on page 3.
Sustainable competitive advantage from Chapter 2, is used in our second alternative solution
showing how Blackberry runs their phones of their own network, something that no other
competitor can do at this time, on page 5.
Target market from Chapter 8, is used in our introduction describing the market that Blackberry
markets to, on page 1.
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