Research in Motion’s Blackber

Research in Motion’s Blackberry Storm Case Study #1 Presented by Simona Antolak, Lianne Hung, Adrian Ver, Michelle Noble, Meghan Hardy and Dexter Holmes.
SLAMM’D Inc. Set D 10/22/2009
Problem:
What product strategies should Research in Motion use to differentiate the Blackberry Storm from the competition to increase sales?
Facts relating to the case:
Who: Research in motion, the developers of Blackberry. Mike Lazaridis, Doug Fregin and Mike Barnstijn.
When: Sales figures of 2009.
Where: Canadian-based company in the global market.
Why: The sales of Blackberry have not met the competition’s.
What:
* Apple has dominance over the consumer market for smart phones.
* Other competitions are entering the same market such as Sony, Microsoft, HP, Google Android, and others.
Research:
See Appendix A, B and C for information on Storm and its competitors.
Blackberry Marketing Budget:
RIM spent $29.8 Million dollars in 2007. In 2008 RIM spent 6% of its revenue ($6,009,395,000) on Research and Development and 14.7% of its revenue on Marketing, Selling and Administration.
Target Market:
The target market for the Storm is young professionals from ages 20 to 40. They are business-savvy and technologically-savvy people who require access to their information at their fingertips for their daily activities. Blackberry has recently found that there is potential in the younger market for students that have interest in the capabilities of the product. Although it is not their key focus, they are working to attain a higher market share with this demographic.

SWOT:
Strengths:
* Worldwide leader in cutting-edge technology
* Expanding global consumer base
* Has developed an established brand
* Has a loyal market share Weaknesses:
* Canadian companies are perceived as conservative businesses that cannot venture outside of their borders and are shadowed by our larger by population U.S. neighbour.
* Managing the company`s explosive growth
Opportunities:
* The overall smart phone market is growing faster than ever.
* In 2013, IDC predicts that 20% of the 1.4 billion phones sold will be smart phones. The 7% growth in smart phone sales is a potential market that RIM can tap into.
* Their margin is 20%, half of Apples margin at 40%, which gives them the opportunity to increase their margin
Threats:
* Investors are worried about the company`s growth
* Apple`s market share is increasingly growing (According to the Change Wave Research, as of May Apple had 20% of the enterprise market, up from 6% in one year)
* Potential consumers are bound by cell phone contracts that can last two to three years

Assumptions:
In order to execute our alternative solutions, it is assumed that the budget that RIM allocates for Research and Development and Marketing activities can be spent. It is also assumed that the budget increased in 2009 from the 2007/2008 budget. Other assumptions that were made based on research and information within the case:
– There is an available market of people that are not technologically inclined and would appreciate a more user friendly model with larger numbers and buttons.
– Students would find the Storm applicable to their daily student activities.
– The key target market for the Blackberry Storm (business market) hasn’t been fully penetrated and could have potential to be fully penetrated.
Alternative Solutions:
Solution One: Product Development.
“RIM believes one way to continue growing in the crowded U.S. market is to develop targeted products for specific groups of customers.” In order to achieve this goal, the Storm will come out with customized user interfaces to appeal to smaller niche demographics. Since the phone is mainly screen based this leaves a lot of room for customization to the design. Specific groups such as teens, less tech savvy and strictly business would be targeted directly with this solution.
For the teen group (age 10-16) the phone will be designed to appeal to what the group wants; focus on fun and entertaining apps already downloaded to the phone, an interface that is colourful and fun, and with a strong focus on instant messaging, texting and social networking websites. For the business group the phone will be no frills and focused on being quick and well designed to appeal to people who want all their work on the go; a simple and slick design with focus on email and organizational planners. For the less tech savvy (40+) we want a phone that they don’t have to ask their kids how to use, very user friendly with obvious functions, large buttons and easy to read interface. These new user interfaces have the opportunity to expand into smaller demographics depending on what people want in the future. Along with the new user interfaces RIM will release a new ad campaign focusing on the new usability of the Storm with commercials and magazine/news paper ads focusing on the new interface designs of the Storm with a slogan of “Blackberry storm, it’s what YOU want”
Advantages: (1) It caters to a variety of markets satisfying individual needs and wants. RIM will be offering three interfaces: teens, business and elderly. (2) Creates a competitive advantage over the competitors with a user friendly interface. (3) Opens up new markets that have not been tapped into.
Disadvantages: (1) It is uncertain how the target market will respond to the change in the software. (2) People may take offense to being placed into preconceived categories. (3) Takes more time and money to develop the interfaces.
Solution 2: Market Penetration
RIM already has a strong business market share of business market men and women from 20 to 40, but there are still a lot of potential customers in the market that RIM has yet to bring in.
We are going to attempt to bring these potential customers in through a new advertising campaign with a strong business focus. The campaign slogan “Business or Pleasure, why choose?” will head the campaign, which is focused on displaying not only the business side of Blackberry’s Storm but the Fun applications that the Storm could bring to the younger business crowd. The Storm still has all the components that professionals love in Blackberry products but it will now have new applications like a music store to buy music, the best camera on the smart phone market, and an application store for fun new apps to add to the phone. We want the market to see the unique functions that the Storm brings to the smart phone. The campaign will be shown through Television, newspaper, and magazine ads. Along with these we will do product placement in shows like Entourage that showcase the product used by the market that we are going after. We will also work with cell phone providers to have a discount on the Storm: Bring in your two old blackberrys and get the Storm for half price. This will entice Blackberry veterans to try out the storm where they previously might not have, and also encourages company loyalty.
Advantages: (1) Advertising for the product will potentially reach our target market as well as other markets. (2) Increases customer loyalty by offering the Storm for 50% after the second Blackberry. (3) Potentially increases the overall sales of the Storm as well as creating word of mouth marketing.
Disadvantages: (1) Takes away sales from other Blackberry products. (2) Additional advertising will increase the overall expenses. (3) A risk of not bringing in additional sales.
Solution 3: Market Development
Since the Storm is a variant of the blackberry product, RIM will focus the Storm to target a younger demographic (13-25) than its previously sought business market.
The Storm has fun features and brings a more youthful design under the Blackberry umbrella, and with a focus on Youth we feel RIM will gain a new market with this phone, while keeping its previous business demographic in its regular phones. The campaign will be headed by the slogan “BrainSTORM” focusing on the benefits the Storm can bring to you in school, as well as in your personal life. Ads will be distributed in Television mainly with online campaigns through social networking sites.
Advantages: (1) Targeting students reaches a new market that Blackberry hasn’t tapped into yet. (2) The features that the Blackberry possesses could appeal to students, increasing potential sales. (3) The”BrainSTORM” creates brand awareness around the Blackberry Storm that targets students.
Disadvantages: (1) May be unaffordable to students due to their limited budget. (2) Risk because it is unknown how the student market will react, as it is not the typical market that Blackberry generally targets. (3) “Putting all your eggs in one basket”- marketing towards only one market.
Final Solution- Plan of Action: Market Penetration
To introduce Research in Motion’s Blackberry Storm in a new light, which emphasizes its appeal, a variety of marketing tactics need to be implemented.
1. Create the advertisements targeting the business market.
2. Launch the advertisements in different forms of media such as television to news hours to newspapers.
3. Get in contact with cell phone distributors informing them of the deal/discounts.
-> Need flyers
-> Signage for store
-> Online/ website
-> Every time Blackberry sold need to mention the discount
4. After the cell phone discount; send a thank you note or message via email
Course Concepts:
1. Growth Strategies: Market Penetration, Product Development
2. Creating interfaces will create a “Sustainable Competitive Advantage”
3. Demographics and Psychographics
4. Target Segmentation

Appendix A.
Blackberry Storm- Taken from (http://worldwide.blackberry.com/blackberrystorm/storm_specifications.jsp)
Size:
Height: Width: Depth:
112.5 mm (4.4 inches) 62 mm (2.4 inches) 13.9 mm (0.55 inches)
Display:
* High resolution 480 x 360 pixel color display
* 3.25″ (diagonally measured)
* Transmissive TFT LCD
* Supports over 65,000 colors
* Dynamic hardware brightness control
Camera & Video Recording:
* 3.2 MP camera
* Flash
* Auto-focus
* 2x digital zoom
* Image stabilization1
BlackBerry Storm Battery Life:
* Standby time: 15 days (356 hours)
* Talk Time: 6 hours
* Battery: 1400 mAhr removable/rechargeable cryptographic Lithium cell
Storm features:
* Wi-fi
* Data input and navigation
* Voice input and output
* Media Player
* Ringtones and notifications
* Bluetooth
* Security
Appendix B.
Iphone – Taken from (http://www.apple.com/iphone/specs.html)
Size:
Height: Width: Depth:
4.5 inches (115.5 mm) 62 mm 2.4 inches (62.1 mm) 13.9 mm 0.48 inch (12.3 mm)
Display:
* 3.5-inch (diagonal) widescreen Multi-Touch display
* 480-by-320-pixel resolution at 163 ppi
* Fingerprint-resistant oleophobic coating
* Support for display of multiple languages and characters simultaneously
Camera & Video Recording:
* 3 megapixels
* Autofocus
* Tap to focus
* Video recording, VGA up to 30 fps with audio
* Photo and video geotagging
* iPhone and third-party application integration
Iphone Battery Life:
* Up to 12 hours on 2G
* Up to 5 hours on 3G
Iphone features:
* Intelligent keyboard
* Multi-touch
* Accelerometer
* Maps and GPS
* Break through internet
* Large app. Store
* Itunes music store

Appendix C.
Palm Pre – Taken from (http://www.palmpre.org/specs)
Size:
Height: Width: Depth:
100.5mm (3.9 inches) 59.5mm (2.3 inches) 16.95mm (0.67 inches)
Display:
* 3.1-inch touch screen
* 24-bit color
* 320×480 resolution
* HVGA display
Camera & Video Recording:
* 3 megapixel camera
* LED flash
* extended depth of field
Palm Pre features:
* Messaging
* GPS
* Sensors
* Bluetooth

References:

Blakely, L. (2008). Apple’s Advertising Budget: Revealed! Retrieved October 10, 2009 from: http://industry.bnet.com/technology/1000574/apples-advertising-budget.htm

Hempel, J. (2009). Smart Phone Wars- Blackberry’s plan to win. CNN Money. Retrieved October 11, 2009 from: http://money.cnn.com/2009/08/12/technology/blackberry_research_in_motion.fortune/index.htm

Wireless Phone Advertisers Spent $4 Billion on Ads in ’07 (2008). Marketing Vox. Retrieved October 10, 2009 from:
http://www.marketingvox.com/wireless-phone-advertisers-spent-4-billion-on-ads-in-07-038856/

White, B. (2009). RIM’s Blackberry Storm a success, but not a homerun. Retrieved Oct. 11, 2009, from: http://www.bloggingstocks.com/2009/01/26/rims-blackberry-storm-a-success-but-not-a-homerun/

RESEARCH IN MOTION’S BLACKBERRY STORM October 22, 2009

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