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STORM VS. IPHONEBy UBAM Hammerheads

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CASE BACKGROUND

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RESEARCH IN MOTION LTD. (RIM)

Rim the parent company of Blackberry founded in 1984

Founders were 3 engineering students from Waterloo Uni (Mike L, Doug F, and Mike B )

Originally the company was meant to answer friends tech needs but later blew up into what it is today

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RIM’S EARLY YEARS

First Product was the inter@ctive 950 which was a two way pager (developed with Ericcson)

Was meant to be a direct competitor with SkyTel which was developed by motorolla

Many other products followed including the first Blackberry in 1998

A year later (1999) the Blackberry 850 was released and featured the first QWERTY keyboard

Source: wikipeida.org(Left: BlackBerry 850)

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LATER YEARS After the release of the BlackBerry 850 many different models

of followed More recently, the Storm has been released The Storm is now seen as a direct competitor to the Iphone and

has many similar features such as a touch screen, applications, built in camera and more

Storm wishes to overtake the Iphone in the smartphone Market

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IPHONE

The Iphone, developed by apple, has revolutionized the way consumers think about phones

It features and innovative interface that’s both friendly and easy to use

Apple has been dominating the smartphone market ATM with $19,000,000,000 (billion) in sales in 2007 alone

This number is triple that of its sales revenue three years earlier.

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PRICES

Iphone:

4GB model = $499 8GB model =

$599

Blackberry Storm:

$469.75 to $699.90

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THE BIG QUESTION!

The current market situation poses us with the question:

What can Blackberry do to compete with Apple and other contenders in the consumer

market?

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KEY FINDINGS

Apple’s iPhone has similar features as the Blackberry Storm, but Iphone’s dominate the consumer market, and Blackberry’s dominate the industrial market.

Other companies are trying to grasp a part of the market share

From 2005-2007, Apple’s sales triple and reached $19 billion – direct competitor of Blackberry

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CASE ASSUMPTIONS

We are only considering the Blackberry and iPhone based on no-contract prices

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KEY FINDINGS

Blackberry Storm I-phone

Interchangeable long lifeRemovable battery

decentNon-removable battery

exterior Short cut keysmicro sd card slot, sim card slot4 buttonsblack

Lock switch, mute switch, power buttonsim card slot1 main menu buttonblack, white

Camera & video 3.2 MP Camera (light flash, zoom, built in mirror)video recording

3MP Cameradownloadable video camera (application)

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GOALS AND VALUES OF RIM

Our focal marketing value is Customer Relationship Management (CRM).

Our marketing plan should be flexible enough to be prepared for the best and worst case scenarios

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RESEARCH: COMPARISON BETWEEN BLACKBERRY STORM & IPHONE

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TARGET MARKETS

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TARGET MARKET

We used demographic segmentation to determine age as one of our target markets. The majority of current Blackberry users are between the ages of 25+.

We also used psychographic segmentation to determine lifestyles as our second target market.

The majority of current Blackberry users are business professionals, who are very busy and enjoy the efficiency of Blackberry’s.

However, more recent blackberry sales have been represented by the consumer market.

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MARKETING STRATEGY

We will be using the mass marketing strategy because we are offering the same product to different groups: the age group of 25+, business professionals, and the consumer market. We are offering the same benefits for all these target markets.

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SWOT ANALYSIS

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STRENGTHS

Award winning Products for every need Excellent customer support (technical phone support open 24 /7) Highest sales for smart phones Worldwide sales and production (made in Hungary ,Mexico and Canada) Loyal supporters

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WEAKNESSES

RIM has only one product brand - Blackberry 

RIM is limited in market, since RIM is not a cell phone company like NOKIA, nor a electronic complex like Apple.

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OPPORTUNITIES Diversify the products – increase the

product line’s breadth or depth Learn from Apple, increase the accessory

market Work on the mobile network, find a new

mutual-benefiting way with a network provider

Expand in other areas, e.g. PDA, PC telecommunicating.

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THREATS

RIM might not be able to defeat Apple by lowing the price

Other threats: Sony Microsoft Palm HP

There will be more competitors entering the Smartphone market

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COMPETITIVE ANALYSIS

Competitors

• iPhone from Apple

Strengths

• Blackberry models with 480 pixel resolution and WiFi offer PrimeTime2Go, an $8/month TV service that works as a DVR.

Weaknesses

• iPhone has 85000 applications whereas Blackberry has only 2000.

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IDENTIFICATION OF ALTERNATIVES

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COST MANAGEMENT (PRODUCTION PLAN)

Moving production and manufacturing to a developing country

Which lowers of operation costs so we can reduce the price, which will increase sales

May lose profit/ or generate revenue

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DESIGN YOUR OWN BLACKBERRY- CUSTOMIZE (DIY BLACKBERRY)

Having the option of customizing the exterior

Creating variations to your satisfaction ROYGBIV, silver, gold, white, and

transparent Customizable prints by sending in

orders to BlackberryDiY.ca

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CHANGE THE CAMERA

Upgrade the camera from 3.2 MP to 5.0 MP

Improve the flash

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EVALUATION OF ALTERNATIVES

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ALTERNATIVE 1: COST MANAGEMENT (PRODUCTION PLAN)

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ALTERNATIVE 1: ADVANTAGES

Blackberry’s will be sold for a cheaper price, keeping the profit constant

Production costs will be cheaper Cheaper shipping costs

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ALTERNATIVE 1: DISADVANTAGES Unethical because it may involve child

labor Start-up costs to open a brand new

production would be really big Operating costs may be larger than

profit for the first few years

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ALTERNATIVE 2: DIY BLACKBERRY

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ALTERNATIVE 2: ADVANTAGES

Appeal to a larger, and multiple target markets

Giving customers multiple options Adds style & personality to the phone

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ALTERNATIVE 2: DISADVANTAGES It will costs more to make different

templates Extra labor & training Time

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ALTERNATIVE 2: CHANGE THE CAMERA

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ALTERNATIVE 3: ADVANTAGES

More clear and vivid pictures Clear video recording quality Eliminates the need for consumer to

purchase an actual camera

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ALTERNATIVE 3: DISADVANTAGES Upgrading camera pixel would increase

production costs May not be a significant improvement

to the blackberry storm Battery life will be shorter

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SOLUTION: BLACKBERRY DIY

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BLACKBERRY DIY

We chose this solution to expand our target market and include Generation Y.

Trying to compete in consumer market with iPhone with a more significant and practical change

Though marketing expenses would increase to advertise the new option,

The labour and production costs will be cheaper than creating a whole new smart phone

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PLAN OF ACTION

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PRODUCT DEVELOPMENT

The RIM design team will create visual images of the products

Step 1

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MARKET TESTING

We plan to use the Test Marketing method to introduce our new product to a small geographical region (Vancouver, BC)

We will estimate the demand for the entire market based on results we receive

Although this is time consuming, we are able to study actual consumer behavior

Step 2

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PRODUCT LAUNCH

To ensure our product launch is successful we will have a marketing team who will be advertising Blackberry DiY:

Train our technical support staff to be able to answer consumer questions, and education them as well

Ensure that there are products available at convenient and popular locations

We will start with a high price, and lower the price when sales drop

We are choosing November 1st as a date to launch the product because it is near Christmas season (gifts)

Step 3

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MARKETING MIX

Target Marketing and

Positioning

Product: DiY

Blackberry

Place Strategy:

Order Online

Price Strategy: Cost-Based

Pricing

Promotion Strategy: Promote

it to Gen Y (consumer market)

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EVALUATING OUR RESULTS

We will review if the product launch was a success or failure

We will analyze the performance of the product, customer acceptance, and if the product satisfies our financial requirements

Step 4

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IF PLAN OF ACTION FAILS

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PLAN B

If Test Marketing fails, the project will be terminated

But since the product isn’t launched worldwide, we won’t lose that much money

Collect feedback and complaints Go back to design team and modify the

plan accordingly.

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COURSE CONCEPTS USED

The Strategic Marketing Planning Process- Chapter 2

Segmentation, Targeting, and Positioning- Chapter 8

The 4 P’s: Marketing mix

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SCHEDULE

http://www.blackberrycool.com/2008/10/05/blackberry-storm-product-positioning-document-leaks/

www.youtube.com/watch?v=XvMITVn41LA&feature=PlayList

For more info . . .List location or contact for specification (or other related documents)

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