Marketing Plan for BlackBerry Term Paper

Executive Summary

The BlackBerry is Smartphone manufactured by RIM. It has been having a large market share, especially in the North American market. However, it is currently facing stiff competition from other products such as the Apple iPhone and Nokia Smartphone among others.

The main target for the BlackBerry has been the business users and it has not been able to effectively attract the mainstream consumers. Such Company as Apple has been able to produce products that have been attractive to the majority consumers.

However, RIM can still take appropriate measures to avoid losing its market share by coming up with a new series BlackBerry Smartphone to add it to its product line with an intention of increasing its market share in North America as well as in the foreign markets such as China, parts of Africa and Europe.

The company will have to capitalize on the available opportunities and its strengths and to make the necessary efforts to overcome its weaknesses and threats in order to win the competition.

In this marketing plan, the situation of the BlackBerry product has been assessed and analyzed; the available literature concerning the problem of stiff competition and losing the market share by BlackBerry has also been looked at.

In addition, a marketing strategy to be employed in introducing the new BlackBerry product to the market has been given and the financial projections and implementation plan has also been given in this marketing plan.

Situation Assessment and Analysis

According to Gowda, Szabo, Choi, Hauk & Salt (2009), “Research In Motion – RIM, pioneered the development of the Smartphone market in 1998 with the BlackBerry, positioned in government and enterprise target markets” (Gowda, Szabo, Choi, Hauk & Salt, 2009, p.3).

The BlackBerry has gained a competitive edge following its recognition as being an “all-in-one portable wireless communication device” (Gowda, et al, 2009, p.3). It has a broad portfolio of Smartphone products which include; BlackBerry Tour, Bold, Pearl and Curve series (Gowda, et al, 2009).

On the was of this product getting more popularity, it goes without saying that it would be meaningless if the RIM Company depends on the sales of the present existing enterprise in order of ensuring the retaining of the products in the market. Following this realization, a move to introduce the BlackBerry Storm series was taken in 2008 and the main aim for this was to accommodate the majority consumer segments.

However, this new series brought about “low customer satisfaction rates”. Another move was taken in 2009 to bring improvement to this series in which there was launching of the Storm2 series. However, the consumer expectations are ever changing and the competitors are always on the lookout to satisfy the consumer needs.

Therefore, it is essential that RIM develops a new BlackBerry series product to add it to its product line in order to win the competition since the competitors in the Smartphone market such as Apple and Nokia are becoming more and more innovative.

Research In Motion is a company that became very popular all over the world getting its popularity each day with a high speed. There are more than 14 million people who preferred the Blackberry production and, in total, the users come from different places of the world. Between the year 2005 and 2009, its revenue approached over $11,000 million. Out of this revenue, 92 percent came from outside North America.

In 2009 financial year, the revenue increased by 84 percent over the financial year 2008 (Datamonitor, 2009). The company has realized growth “by expanding in to foreign markets where it held 18.7 percent of the global Smartphone market share in 2009” (Datamonitor, 2009, p. 1).

Strong financials bring in investors and enable RIM to realize growth with coming up with new products as well as new solutions. However, this company encounters a danger to its global share and revenue as a number of its competitors enter the industry and come up with new products.

The forecasts that were made gave an indication that the Smartphone market would increase by 19 percent all through from the year 2009 to 2011. Even if there was a decrease in the sales of mobile phones by 9 percent at the start of 2009,”the Smartphone movement increased by 13 percent despite the economic crisis” (Datamonitor, 2009, p.3).

The consumers of the Smartphone have given an indication that they have attached value on the multi-media applications and entertainment in their mobile devices. This tendency offers an opportunity for RIM to expand its product lines by putting much of its focus on the needs of the mainstream consumers.

Competition

RIM takes up the 20% of the global Smartphone market share. Even if this share is remarkable, the company is facing threats from its competitors and it is constantly fighting to remain on top of the competition. Its competitors in this market include “High Tech Computer (HTC), Apple, Nokia, Google’s Android, Samsung and Palm” (Gowda, et al, 2009, p. 4).

Considering the Apple Company, in the financial year that ended in September 2008, its net sales amounted to $11.8 billion. Basing on the research that was conducted, it was established that the Apple Company was able to take up 13.3 percent of the global market share “as their 3 GB iPhone is growing in popularity selling for $199 with a service contract” (Datamonitor, 2009, p.4).

In addition, the iPhone offers a competitive advantage, “as the device is able to run upwards of 85,000 applications providing higher utility for customers” (Datamonitor, 2009, p.5). In a similar manner, Nokia dominates the Smartphone global market share at 40 percent, posing a threat to North America market shares (Abkowitz, 2009).

SWOT Analysis

Strengths

One of the strengths of the BlackBerry product is the brand image. This product has one of the best images for the mobile phones in the current mobile phone market. The diverse business it has possesses various products for its greater range of consumers.

The other strength is that it is an innovative product. The software of the BlackBerry is designed very well. This phone is greatly secure it combines well with other platforms. It operates well with various other carriers which make it possible for it to be utilized all over the world. This device is quite easy to manage. It’s battery life is longer than the standard one.

The third strength is the product features. This product has “a small form-factor with an easy-to-use-keyboard” (Randhawa et al, 2009, p.2). RIM has the patents for the “thumbwheel and QWERTY keyboard found on the device” (Randhawa, et al, 2009, p.2).

In addition, the device has a “speedy mobile e-mail provider” and it has coverage in a large number of major nations. The Blackberry Smartphone is very comfortable to use when monitoring the e-mail messages. It is a very convient and portable way of being connected to the Internet as well. The global utilization of this product is one of “its best known assets” (Randhawa, et al, 2009, p.2).

Weaknesses

One of the main weaknesses of the Blackberry is ‘Global Coverage Dependence”. The company’s business model which involves entirely selling through operators implies that it relies on its “operators when it comes to launch Blackberry’s services” (Randhawa, et al, 2009, p.2). This consumes much time and the expense of launching this “can be high for small time operators” (Randhawa, et al, 2009, p.2).

The other weakness of the Blackberry is the cost of ownership. This product has a high ownership cost. According to Randhawa, et al (2009), “Blackberry is known as a high-end product that is very costly for enterprises that want to provide e-mail across large organizations” (Randhawa, et al, 2009, p.2).

The other companies competing with RIM have brought to the market products that are less costly as compared to the Blackberry.

The third weakness of the Blackberry is in relation to its features. When it comes to setting up critical applications, the Blackberry does not find it easy but struggles. It does not have “a very large storage of third-party software….when it comes to most people, its main feature is the e-mail utility” (Randhawa, et al, 2009, p.2).

Opportunities

One of the available opportunities is the wide range of offerings for mobile workers. The increasing number of consumers will, in the future, need to be satisfied and the Blackberry will be at their service to ensure the consumers’ needs as are satisfactorily met.

RIM will seek to ensure the enlarge of e-mail all across the world towards a market which is divergent and popular at the international level. Consumers have the knowledge about this value but they do not have the willingness of paying a premium.

The other opportunity is that RIM “extends the range of third-party Blackberry devices” (Randhawa, et al, 2009, p.3).

At a time Blackberry engages in licensing its software via “Blackberry connect and Blackberry programs” it is in a position to increase control against other users who have preference for the platforms of the Blackberry and “It is easily addressable in global markets and features certain products in markets worldwide” (Randhawa, et al, 2009, p.3).

Threats

The biggest threat that the Blackberry faces is the competition. The Blackberry is currently experiencing stiff competition from other products such as the Apple’s iPhone than it has ever experienced. There are various suppliers all over the world which give competition to Blackberry on each and every coming day.

Blackberry competes as well with its operators; a large number of them have ensured launching of their own “branded e-mail service” (Randhawa, et al, 2009, p.3). There is a great competition in gaining popularity at the level of economic marketing within the mobile industry that bases on the competing of Blackberry with the products that are eager to imitate or to overcome this mobile product.

Marketing Research (Literature Review)

According to Tsirulnik (2010), even though the BlackBerry is the largely used Smartphone in the U.S, with about 43 percent of the market share, there seems that its application strategy has not been a success. In comparing RIM with the Apple Company, the RIM’s BlackBerry App World is remarkably “less crowed than Apple’s App store” (Tsirulnik, 2010, para. 2).

By the beginning of the year 2010, there were about one hundred and fifty thousand applications in iTunes while the “BlackBerry App World” did not have more than fifteen thousand applications. Moreover, it is reported that Android was a little higher but in a similar ballpark.

“There is no too much going on in terms of branded BlackBerry applications and it is rather ironical considering its market share” (Tsirulnik, 2010, para 2).

It has also been reported that the iPhone/Android platform do have touch functionality that is superior as well as navigation from App store to application to a larger number of the BlackBerry devices (Tsirulnik, 2010).

In addition, “the Androids and iPhones are preloaded with their app stores but on the other hand, a person using a BlackBerry has to download App World in case he or she wants to use it” (Tsirulnik, 2010, para 22).

However, it is pointed out that “BlackBerry has a great opportunity to win over the enterprise and B2B market, as companies are far more likely to incorporate companywide BlackBerry solutions over the iPhone, which constitutes a significant barrier to entry for the iPhone” (Tsirulnik, 2010, para 22).

Tsirulnik poses a question that; “will BlackBerry App World measure up to the iPhone” (Tsirulnik, 2010, para 10). The iPhone has a large “installed base of seventy five million iPhone and iPod devices and counting, all feeding on billions of downloads of 150,00-pluc applications” (Tsirulnik, 2010, para 11).

The success of the “iPhone App Store” is attributed to its marketing support which include; “existing infrastructure of application review sites, blogs and YouTube review sites” (Tsirulnik, 2010, para 12).

Research in Motion is supposed to obtain more developers as well as brands which have interest in the creation of the entertaining and fun applications for the company’s platform ((Tsirulnik, 2010).

According to Arthur (2011), RIM has been gradually losing its market share in the course of the last two years to phones that make use of the Google’s Android OS as well as to the Apple’s iPhone, and especially in the U.S market which was once the company’s biggest market.

However, this company has been able to gain the market share in other countries in Africa, Europe and Asia, and especially in China. It is reported that the company has been able to gain a bigger market share than that that has been held by the former market leader Nokia for Smartphone sales in parts of Africa and China (Arthur, 2011).

However, although the profits of RIM increased in the most recent quarter of the financial year 2011, there was sequential fall in the handset sales, giving an indication that the customers were not renewing contracts but they were instead purchasing touch-based phones for RIM’s competitors such as Apple, Samsung and HTC (Arthur, 2010).

According to Arthur (2011), “RIM’s customers split roughly 50 -50 between business users and consumers, where the general Smartphone market is split 30-70” (Arthur, 2011, para 11).

The consumer market is bigger and following this, problems have been created for RIM in its attempts to expand the customer base “as the iPhone and Android phones have so far proved more popular with the first wave of consumer Smartphone buyers” (Arthur, 2011, para 11).

According to Siebes (2010), following the industry wide competition, there has been increased spending in research and development at RIM and this has in turn led to a decrease in profit margins to a considerable level between the year 2007 and 2010.

Moreover, there has been an eight percent increase in the cost of sales during the same period and at the same time, there has been a decrease in the average selling price per unit to $311 in 2010 from $371 in 2009 (Peers, 2010).

To a great extend, the rise in the cost of sales is attributed to increased level of spending on research and development and at the same time, the decreasing unit selling cost is a result of end-consumer expectations “in a market where RIM’s BlackBerry is no longer one of just a few alternatives” (Siebes, 2010, para. 4).

It is pointed out that the company is not just about to make a loss but it is imperative that to the company’s stakeholders for it to maintain high profit levels (Siebes, 2010).

As on one hand it is not realistic to have expectations of the company’s profit margins going back to the previous highest levels any time in the near future, some actions are supposed to be taken to ensure that there is slowing down of the rate at which the profit margins are decreasing in the short time, and to ensure that there is an increase in the profit margins in the long run.

Marketing Strategy

Marketing Mix

Product

To this point, RIM has transformed “mobile phone communication devices with the BlackBerry smartphone” (Gowda, et al, 2009, p.5). The best idea would be to add to the product depth by bringing in a new BlackBerry to the product line by coming up with a multi-media device to meet the consumers’ needs in a better way.

Price

The setting of the price point will be done by the pricing strategies of the competitors. For the clients who long to have the satellite service, there will be predetermining of the extra charge.

Place

There will be distribution of the new BlackBerry product through the North American service carriers as well as the Global carriers, retail outlets and also through the “Black Berry promotional website” (Grewal, 2009, p.9).

Promotion

The company will engage in communicating the advantages of the new BlackBerry product to the consumers and it will do this through tailored advertisement campaigns, ”internet marketing, viral marketing, social media channels and exclusive offers to current and new customers” (Grewal, 2009, p.9).

Financial Projections and Analysis

It is projected that within the next one year, there will be a gradual increase in the BlackBerry market share and the company’s profits are projected to increase at a rate of 10 percent per year. However, in the long run, after between three and five years, it is expected that the profits will increase by about thirty percent.

Target Market

The present BlackBerry target market is formed by a population consisting of middle to upper class consumers who fall in the age range between 30 to 55 years in the “professional, executive, and industrial segments” (Gowda, et al, 2009, p.4).

The main target for getting new clients is the mainstream consumer market where the RIM Company will enter this segment by putting the changes in the consume expectations in to consideration.

The company can bring the Smartphone products in to the market with more multimedia components to go with the interactive lifestyle of the consumers. In order to go on with the long-term growth, “RIM will target the next generational cohort. Tweets’, who are adept to technology, social media and have considerable influence on their parent’s consumer behavior” (Grewal, 2009, p.20).

Strategies, Implementation and Controls

The RIM to be able to satisfy the needs of the next generation of consumers and expand its global presence and increase its Smartphone market share, it has to increase its product depth. It has to add a new series to the BlackBerry Smartphone product line. In order to realize this, it needs to take various measures.

One of the measures that need to be taken is product development. The current capabilities of the BlackBerry devices will not be sufficient in meeting the ever changing expectations of the consumers in the long run. The company can expand its market share both in North America and globally by ensuring addition of a BlackBerry series to the product depth under the mobile communication devices breadth.

The new BlackBerry series that the company will have to come up with will have to feature increased multimedia and application capabilities, “non-scratch recycled metal, a full LED touch screen in combination with Qwerty keypad on the reverse side of the device, and a satellite service option for all customers” (Gowda, et al, p.5).

The “satellite service will give out a higher value and greater utility for consumers who have a desire to use their phone at any place in the world.

The advantage of this new BlackBerry product line will generate and give value by ensuring that the ever changing needs of the existing and new consumers are satisfied within the targeted market segments.

The new alternative would facilitate sustenance of growth because a new product creates motivation for clients to go on buying BlackBerry products and offer greater utility with the features that have been added.

Having a complete product line, this will enable the BlackBerry products to resist the external threats that are posed by the competitors. The new BlackBerry product will stimulate a sales increase as new products bring in a big proportion of revenues and dominate over other products.

However, some disadvantage may be brought in case RIM does not succeed in satisfying the changing needs of the expectations of the consumers because this will bring about revenue loss and a reduction in the profits. If there is no demand for the new product, this may in turn reduce the value of the BlackBerry brand; thus discouraging the existing as well as the new customers from purchasing any BlackBerry brand

. In addition, the competitors may decide to improve on the concept on which BlackBerry may base on when developing this new product line and bring to the market an improved model to capture the market share in case this new product does not succeed.

But RIM should foresee this and take appropriate measures to avoid such risks. Adequate research should be carried out to ensure the new product does not fail and serve to satisfy the ever changing consumer needs. Precaution should be taken to ensure the product has not weaknesses on which the competitors can capitalize on it and for them to bring in to the market an even more improved product.

Another move that needs to be taken by RIM after developing a new product is market penetration. In order for this company to increase the Smartphone market share is the business as well as consumer segments, it can ensure that the brand awareness is increased.

It can do this by communicating the superior benefits of the new BlackBerry brand. In order to bring up the level of the brand awareness, and to ensure intensification of the distribution efforts, the company can open BlackBerry stores having specialized BlackBerry service, situated in the business centers as well as suburban regions across the globe, and mostly in Asia, Europe and North America regions.

One of the Benefits that will accrue from this is that, by bringing improvement in the marketing mix and open the BlackBerry stores in the existing markets, the company will be able to penetrate its markets and increase its market share.

Adding to the “place of market distribution, this will serve as an additional vehicle that will be used to strengthened its communication of its BlackBerry products through customer service quality. Moreover, the company’s BlackBerry “specialty stores” offer added value to the products, through providing convenience and product knowledge to both the current as well as new customers in the targeted markets.

However, there are some disadvantages that the company may encounter following taking this move. For instance, there will be no compensating of the additional marketing costs in case the additional promotion and distribution places turns out to be fruitless.

In such a situation, the company will loose its market shares to its competitors who may offer innovative products with higher perceived value. If RIM does not move fast and delay in launching the new specialty stores, the customers may not be motivated to purchase from the BlackBerry product line.

But the most important thing is the company to consider these shortcomings and ensure they are avoided as much as possible.

The other move that can be taken by RIM to gain a larger market share and improve its sales and profitability is to develop the market. The company should seek to further penetrate the global markets by collaborating with mobile carrier service sin nations having emerging markets to increase the market share for its Smartphone.

An advantage of this is that, in a large number of developing economies, there is an increasing percent of middle-class household who starting to purchase technological devices.

This offers an opportunity for the company to capture market share and bring up the level of the revenue. Going on to collaborate with co-brand with the global mobile service carriers promotes a number of consumer perceptions of the quality of the product and ensures value addition to the BlackBerry products.

One of the drawbacks that may be associated with this is that the potential that go on co-branding with the global mobile service carriers may fail on the side of RIM because, it is pointed out, “global carrier brands are suited to respective geographic regions and demographics in the different cultures, resulting in different customer profiles” (Gowda, et al, 2009, p.8).

The global carrier companies may swift the priorities they have making the co-branded products not to be continued. Consequently, customer loyalty as well as customer relationships which are brought about by the co-branded products would actually be lost. Another drawback may be that venturing in to the foreign markets may be obstructed by the regulations put in place by governments in thee countries.

References

Abkowitz, A. (2009). How BlackBerry Does It. Fortune, 160, (4), pp.92-100.

Arthur, C. (2011). RIM launches three new BlackBerry devices with BB7 OS. The Guardian. Web.

Datamonitor: (2009). Research In Motion Limited SWOT Analysis, Research In Motion Limited. 3 (1) pp1-10.

Gowda, N., Szabo, C. Choi, Y., Hauk, C. & Salt, G. (2009). Blackberry’s rise in brand power. London: Macmillan and Company.

Grewal, D. (2009). Marketing,. New York: McGraw-Hill Irwin.

Peers, M. (2010) RIM’s Not-So-Smart BlackBerry Strategy. The Wall Street Journal. Web.

Randhawa, et al. (2009). Blackberry’s rise in brand power: The dueling marketing strategies of RIM versus Apple. Marketing Case Study. Web.

Siebes, D. (2010). The future of RIM/BlackBerry. MGMT 647. Web.

Tsirulnik, G. (2010). Has RIM’s BlackBerry app strategy failed?Mobile Marketer. Web.