The assignment focuses on the importance of strategic marketing management in the organisation, like RIM. The first part of the assignment examines the principles of marketing management applied in RIM and the relationship between the strategic marketing and its corporate strategy. The second part of the paper uses the marketing tool to develop the company strategic marketing strategy by planning, positioning and using tactics such as marketing mix. It is then applies the strategic marketing techniques to create growth opportunities in a chosen market and identify the objective and the marketing strategy option in the market. The final part of the assignment analyse the impact of change in the external environment on the company marketing strategy.
1.1 THE ROLE OF STRATEGIC MARKETING IN RIM
Strategic marketing plays an important role in an organisation, like RIM. Every organisation should take serious attention on its company strategic marketing management. It is an important study that ensures the company stays relevant to its consumers and gains profitability by selling the right products or services to the right customers at the right time. Financial success often depends on the marketing ability (Kotler, 2006, page 7)
Marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is ‘meeting needs profitably’
(Kotler, 2006, page 5)
Marketing is powerful tool to tell the people that the organisation has the product or service that meet the requirement of the consumers.
RIM is seen as the global leader in the wireless telecommunication when the company initially launched its Blackberry products around 1999. A lot of people were tempted to own the smart mobile phone. It was successfully embedded in the mind of everyone who saw the new transformation era of mobile phone into wireless telecommunication medium.
Marketing is seen as the process by which organisation creates value for its customers in order to receive value for them in return. (Boddy, 2011, page 257). Hence, the significant role of strategic marketing strategy from RIM has helped boost its smart phone sales avenue. RIM started to enjoy its growth period on 2004 because there were over 2 million subscribers worldwide.
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What made the company products successful is that the company capable to fulfil and satisfy the users demand from business and personal perspectives. Blackberry Messenger (BBM) was a unique selling of point of RIM. Personal users were eager to use BBM to stay connected and chat within their own social group. It was a trend where everyone started using the mobile BBM for sharing personal interest, photos and so on. Besides this, Blackberry fulfil the needs of professional group and business people. It provided the access of organisation data, an organiser, calendar, paging and wireless internet. All of these functions are very useful for organisation that needed mobile workforce. The company was able to meet the needs and wants of both groups, by promoting the products with its unique selling point.
As a result, it can be seen that strategic marketing played an important role for company like RIM to promote its products. RIM fully utilised the good marketing strategy to create values for its customers and in return received values from them. It fulfilled the customers’ social and businesses needs and wants and in return received revenue from them.
1.2 THE PROCESS INVOLVED IN THE STRATEGIC MARKETING OF RIM
Kotlet (2006) described that each company should view the process involved in the strategic marketing, as the value creation and delivery sequence (page 37). The first part is known as choosing value, the second part is known as providing the value and the final part is communicating the value to its consumers. The importance of the process involved in the strategic marketing enables RIM to find ways to fulfil the needs and wants of its consumers. It can be shown as below:
Situational Analysis- PESTEL, SWOT choose the value
Marketing Strategy- Segmentation, targeting and positioning
Marketing Mix Decisions- Product, Price, Place (Distribution) provide value
Implementation & Control- Promotion communicate the value
Situational analysis refers to the analysis from the company external and internal environment by using SWOT, PESTEL or other tools. It is important for RIM to examine the environment to seek opportunities for the innovative products. Kotler (2006) described this stage as choosing the value. For example, RIM can assess its company internal strengths and weaknesses. The company should maintain the strength and find solutions to justify the weaknesses.
After identifying the best opportunity to satisfy the customers’ need, a strategy plan can be done to develop the opportunity. Market research department can provide useful information that enables RIM to determine the target market. The marketing strategy involves with market segmentation, the target consumers and the product positioning.
In the third stage, RIM needs to decide its marketing mix. Marketing mix refers to Product, Price, Place and Promotion. Marketing mix decision is crucial for the organisation. RIM must ensure that the marketing strategy provide value to the customers It is because consumers are only willingly to pay for a product with it perceived value of money.. RIM needs to ensure that the distribution channels are good so that the products are available to buy in the retailers. For example, RIM must ensure that the new Blackberry 10 is available to buy immediately on and after the launch day on 30 January 2013 with the price of perceived value of money.
At the implementation and control stage, the product has been launched and sold for the target market as planned. It is, as Kotler (2006) viewed the stage as communicate value to consumers, because the company has successfully introduced the product with its features and specialisation to its target market. However, the process does not end here, RIM need to always monitor the sales and the feedback from the users, so that the company is sensitive to the customers’ needs from time to time.
The strategic marketing process is important for RIM to promote its product to the right customers at the right time.
1.3 THE LINK BETWEEN STRATEGIC MARKETING AND CORPORATE STRATEGY OF RIM
Strategic marketing must establish close relationship with the organisation corporate strategy. The corporate strategy of RIM must stay relevant with the current market demands in order to stay relevant and gain competitive advantages. It is then the responsibilities of marketing department to support the corporate strategy and promote the company products significantly to the public.
The company enjoyed the profit earning period in previous few years. According to BBC news (31, March, 2010), the creation of Blackberry enables the company to gain profit of 37% rise in 2010 quarter period due to the high sales of the products. The company made net profit of £468million during December 2009 to February 2010. The peak moment of the company was because the strategic marketing was able to support its corporate strategy.
However, the profit earning of RIM has become a historical event for the company. Since the beginning of 2011, the company has a lot of controversial issues. The article on Canadian Business (19 Jan, 2012), ‘How management has failed in RIM?’ explicitly highlighted the problems occurred in the company.
‘What isn’t fully understood is how RIM ended up going from the company that could do no wrong to the company that can’t seem to get anything right?’
The article reviewed that the internal management of the company was in conflict situation. Consequently, the corporate strategy is unsupportive with the strategic marketing and it would fail the company. The company started to struggle in its business and the products failed to attract customers’ interests. The BBC news (15, September 2011) reported that the net profit of RIM fell to $4.2billion for the period of April to June 2011, a drop of 10% on the same three month period last year. There was 2000 job cut in July 2011 to reduce the cost of operation. RIM shipped some 10.6million Blackberry smartphones and about 200,000 Blackberry Playbook tablets, which was well below analysts’ expectation.
It can be seen that RIM and its Blackberry range of products are not able to have positive promises for its future business. It failed to make consumers particularly want to own its Blackberry products. Consumers prefer to seek for other providers, like Apple and Samsung which provide more attractive smart phones and tablets. It is critical for RIM to link the corporate strategy with its strategic marketing. It needs to actively participate in the marketing management perspective to stay relevant in the market place and gain positive publicity.
The new CEO of RIM, Thorsten Hein, has announced that it will launch its new Blackberry 10 on the 30 January 2013. According to the CEO, the new smart phone is closely related to its corporate growth strategy and corporate responsibilities. The company is committed to participate in the communication and social collaboration and working towards minimizing the environmental impact. The new smart phone can be seen as supporting the strategy. The company explains that the operating system of its new smart phone has undergone testing stages with 50 phone carriers around the world. The team is determined to bring their customers innovative features combined with a best quality of class browser, a rich application ecosystem and cutting edge multimedia capabilities. It shows that the company is determined to get the right phone to its consumers. The CEO of the company, Thorsten Hein promises that the new smart phone will create a ‘truly unique mobile computing experience’. (CBA, 12 Nov, 2012).
2.1 THE VALUE OF STRATEGIC MARKETING PLANNING MODELS THAT ARE USED BY RIM
Ansoff Matrix is the powerful marketing tool used by many companies to plan the company marketing strategies for their business growth. It was first published on Harvard Business Review in 1957. There are four important elements in Ansoff Matrix:
Existing Product New
RIM used market penetration to develop its business growth strategy. Market penetration involves the increasing market share within the existing market segment. This can be achieved by selling more products to existing customers or attracting more new customers within the existing market. RIM developed its first Blackberry on 1999. From the last five years ago, the company continuously introduced its various series of Blackberry brand to its customers. There are three types of Blackberry mobile phones: Bold®, Curve® and Torch®. The most dominant users of the mobiles are from Canada, US, Europe and two emerging countries: Nigeria and Indonesia. However, the company loss most of its market shares started beginning of 2012 to others companies, like Apple and Samsung.
Besides this, the company gains less popularity from the rest of the world due to its national security issue. For example, the company stated that it will co-operate with the Indian authorities on ‘lawful interception’, but the company is unable to have access to the whole traffic on its customers’ network. (Vinod Mahanta, 2012)
The Indian authorities see the company mobile phone and network as a threat to the country. The similar case happens to the others countries as well. The issue has insignificantly made the company reluctant to expand and promote its products to other new regions smoothly like Asia, India, South America or Africa markets.
The company announces that the new smart phone, called Blackberry 10 will be launched on 30 January 2013. As interviewed by BBC, the CEO said that the new smart phone has the best features of BB. The CEO and its team hope that the new mobile will be able to gain more market shares and generate revenue for the company.
2.2 THE LINK BETWEEN STRATEGIC POSITIONING AND MARKETING TACTICS USE BY RIM
It is important to examine the link between strategic positioning and the market tactics used by RIM. Strategic positioning refers to how the company places the product in consumer mind meanwhile marketing tactic refers to how the company uses various actions to execute the strategic positioning plan.
RIM successfully positions its Blackberry brand as an exclusive smart phone used for business people and professional. The product suits their needs because it offers mobile workforce that enable them to stay in touch with each other for business purpose. They are able to send and receive message within the group of people. They are able to have business meeting and make decisions by creating a conference from their mobile. It saves them a lot of times to physically meet each other. For example, it can be seen that the US President, Obama chooses to use Blackberry as his first of choice of smart phone for his workforce and stay connected with his team members.
RIM is a company specialised in the wireless telecommunication and innovation. The company gained its’ recognition by introducing the ‘Blackberry smart phone in 1999. The company successfully position itself as the innovative mobile leader in transforming the mobile industries. The company introduced a smart phone that integrated the common mobile phone functions with the internet wireless (Wi- Fi) network. The smart phone changed the way people used their daily traditional mobile phone. Users are able to use their Blackberry genuinely to serve internet, synchronise email, send and receive their e mail and instant messages via Blackberry Messenger (BMM) through their smart phone on their hand. The most dominant feature of Blackberry device is the Blackberry Messenger (BMM) which exclusively available to its user to connect and chat within their own group of people. The company also offers Blackberry Playbook which is a tablet computer.
2.3 THE MERIT OF RELATIONSHIP MARKETING IN THE STRATEGIC MARKETING STRATEGY THAT TARGETS SMART PHONES AND TABLETS CUSTOMERS WITH RIM AND ITS AFFILIATES
The advance technology in RIM fits the company very well to build relationship marketing with its customers, partners and so on. It uses its telecommunication expertise to build the connection and develop value with its customers.
Most of the times, organisation uses relationship marketing to build bond with its customers and to gain customers’ royalty to its business. Relationship marketing refers to the company’s intention to build and maintain a mutual satisfying profitable and long term relationship with its key parties- customers, supplier, distributor and others partners. Relationship marketing is able to build strong economic, technical and social ties among the parties (Kotler, 2006, page 18). It is important for RIM to stay connected with its royalty customers to show appreciation and support. The company needs to retain the existing customers and ensure that the customers stay royalty to RIM, especially at this turbulent moment where there are lots of aggressive competitors like Apple and Samsung. It is also crucial for the company to maintain good business relationship with its partners, like IT developers and suppliers, so that they will also show business rapport in return.
The relationship marketing becomes effective because of the technology advancement. It enables the interaction between RIM and its customers and other stakeholders become easy and meaningful. As a global leader in wireless innovation, the company can easily use internet, website, email and social network like Facebook, Tweeter to develop the relationship marketing with its stakeholders.
The fundamental outcome of relationship marketing is the creation of unique company asset called ‘marketing network’ (Kotler, 2006). The marketing network is the key element that grouped the company with all its relevant stakeholders together. The strong and effective network of relationship will bring profit to the company and bring benefits to all stakeholders.
The strong binding relationship through the relationship marketing enables the company to obtain its customers’ information. The information is important for RIM to identify the current market trend and the potential future trends. The company can analyse the information to plan for future strategies. It can also invest in research and development to innovate new smart phone that suit the customers’ endless demand and gain competitive advantages.
3.1 MARKETING TECHNIQUES TO ASCERTAIN GROWTH OPPORTUNITIES IN THE ASIA OR EUROPE OR ARFICA OR SOUTH AMERICA MARKET
RIM needs to find growth opportunities in other markets through effective marketing technique. The marketing team in the company is responsible to conduct various activities, like collecting and identifying data, anticipating the future trends based on the past data, satisfying customers’ requirement.
Recent news on RIM shows that the company is lag far behind its competitors like Apple and Samsung, although RIM was the leader in the telecommunication system during 1999-2005. The company has delayed the launch event of its new smart phone Blackberry10 (BB10). It will only be released on 30 January 2013 next year. The company hits 78 million Blackberry subscribers worldwide in June 2012 as compared to 70 million in September 2011. There is an increase of 8 million subscribers within a year period. (www. Techcrunch.com) However, analysts and investors believe that the number ‘could be the week that once- phenomenal growth story finally ends’ (The Globe and Mail, 2012). Many analysts see that the total number of Blackberry subscribers is now failing or in the edge of failing.
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It is crucial that the company must find new customers in new markets to buy its existing products. Although the sales in the US and other established market are bad, the smart phone is the first choice in the UAE market, the top smartphone vendor in Latin America with 35% market share and also number one in Africa, with 44% market share. (Cantern Letter, 2012). It can be seen that Blackberry is still popular in the emerging market, especially in Latin America. For this reason, RIM should plan a strategic marketing strategy to understand and match the capabilities of the company with the opportunities available in the market. (is4profit, 2012)
First of all, it is important to analyse the potential for growth in the smartphone usage in Latin America, as shown by the table below:
By referring to the Statista research as shown in Table 1, it is expected that the mobile phone user in Latin America will increase significantly. The current user is 396.2 million on 2012 and it is expected to increase up to 450.7million by the year on 2015. There are increasing numbers of users over the next 5 years.
Table 2 shows the forecast of feature and smart mobile phones shipment to Latin America. It can be seen the consumers are expected to change their feature phones to smart phone gradually from 2012 to 2020.
Besides this, marketing manager in RIM needs to obtain information from Marketing Information System (MIS). Marketing Information System refers to the clear process to collect and analyse information about the marketing environment (Boddy, 2011, page 260). It is important for RIM to gather a wide range of data before deciding the marketing objectives in Latin America market. There are three important types of information to be obtained by the company, as shown below:
1. Market data refers to the information on demographic, geographic and psychographic segmentation which is useful to understand the consumers’ behaviour and trends. It is important for RIM to have market segmentation in order to satisfy the needs of different level of people within the Latin America market, with its various types of Blackberry series.
2. Internal record refers to the data on the company internal sales record, cost and inventory, human resource which is useful to know the company internal strength.
3. Competitor data refers to the data on the existing and potential competitors, the products, and prices. For example, RIM must aware of its aggressive competitors like Apple, Window Phone, and Samsung (with Android)
After analysing and evaluating all the information, it can be a wise decision for RIM to penetrate its existing Blackberry products into the Latin America. RIM can utilise its company capabilities to penetrate its existing smart mobiles in Latin America market, which can be seen as the market opportunities in the near future.
3.2 MARKETING STRATEGY OPTIONS TO USE IN THE SELECTED MARKET
It is critical to choose the most appropriate strategy option to be used in Latin America market. The strategy used must be able to suit the needs and demands of the target consumers. Target market is the segment of the market selected by the organisation as the focus of its activities. (Boddy, 2011, page 265)
The marketers in RIM should decide the target markets by which they are able to meet the consumers’ demands.
According to the Table 3 above, the population under age 15 in Latin America is 28% of the total world population, which is the second largest after Africa region. It is reasonable for RIM to target the youth population in Latin America, with aged 15 – 29.
RIM uses its existing product Blackberry to penetrate in its existing market, Latin America with the focus on younger generation. The strategy is suitable because the products price is relatively cheaper than its competitors, like Apple and it is affordable by the youth with no high income, but the tendency of youth generation to use smart phone is high. They prefer to use the smart phone for communication and media purposes, for example, instant messenger, social networking, email, browsing internet and watching online video. Therefore, RIM can significantly meet their needs by offering Blackberry with its many series that can suit all level of teenagers.
Therefore, RIM uses the market penetration strategy to increase its market share in Latin America. It can be achieved by introducing more Blackberry series of smart phone into the market or attracting more young people to use its smart phone.
3.3 STRATEGIC MAKKETING OBJECTIVE FOR THE SELECTED MARKET
RIM markets its’ Blackberry into Latin America will bring benefit to the company in long term. The business objective is to create the successful long term growth in Latin America market for RIM. Therefore, the marketing objective to achieve this is to attract more customers, promote through sales promotion and establish good distribution channel.
By referring to Ansoff Matrix, market penetration strategy is the low risk option, because the products and markets are already available. Therefore, RIM understands its products very well and the marketers are responsible to find more new customers in the existing market.
The marketing max is an important tool to help the company to achieve its marketing strategy. Marketing mix is commonly known as 4 P- Product, Price, Place, Promotion. RIM must use the right marketing mix to achieve its marketing objective and deliver value to its customers. For example, marketers in RIM must ensure that:
1. The product, Blackberry has the right features which suit the demand of the young people in Latin America. There are few types of Blackberry series (Bold®, Curve®, Torch®) marketers must ensure that the right model is being introduced to the right type of customers.
2. The prices of the smart phone sold in Latin America must be right. It is because the young generation depends on their parents to buy the smart phone, therefore, the price must be reasonable and affordable.
3. Place, which is also referred to distribution channel. It shows that the smart phone must be available to buy in the phone shop. Customers do not need to travel far or wait for a long time to buy the phone.
4. Promotion- RIM must ensure that its customers aware of the product. It can be done through various promotion activities, like advertisement in TV, educational sponsorship for students whose are interest to work in RIM
Therefore, it can be seen RIM meet the strategic marketing objective by choosing and matching the marketing mix significantly. From the forecast on increasing number of the smart phone users and the adoption to change from youth population, strategy marketing of RIM is capable to meet the demand of its customers in Latin America. The demand on smart phone in Latin America is tremendously high, especially when the Olympic 2016 will be hosted in Brazil.
4.1 IMPACT OF CHANGES IN RECENT EXTERNAL ENVIRONMENT ON THE MARKETING STRATEGIES OF RIM
The current business environment is challenging for RIM. The competitors from Apple and Samsung are aggressive. RIM must take serious actions to reform the company business model and keep its fortune.
PESTEL is the most common tool used to analyse the external business environment and examine the influence of the PESTEL on the company. PESTEL analysis enables RIM to look outside and aware of the current and future threats they may face.
First of all, the latest technological development and telecommunication advancement has transformed the world from digital into wireless network connection era. It brings impact on the marketing strategy of RIM. RIM, as one of the main provider of telecommunication firm, must response to the market demand aggressively. The company must stay connected to its loyal customers and meet their customers demand through effective marketing strategy. RIM depends hugely on the internet to connect with its 78 million subscribers worldwide. The marketing techniques used by the company are setting up its webpage where users can assess to its company website freely. The company provides and update the details on its products, corporate responsibilities, careers opportunities and press releases through its website. The company also uses the social networking websites, like Tweeter and Facebook to market its products and actively seek its users’ reviews and recommendations on the social network website, as strategy to promote the products.
Besides this, the political and legal requirement of a particular country also brings impact to the marketing strategy of RIM. RIM has been known for its extreme secure corporate email which blocks any authorities to assess to the content of the email. This has threatened India national security issue.
As a result, the government of India has threated to close the company and block the sales of Blackberry in India if RIM refuses to provide encryption key to the India authority. Consequently, the company must find solution on the issue. RIM has finally agreed with the India government to allow an authorised film to intercept messages and email exchange between Blackberry smart phones.
India is one of the important markets for RIM to sell its Blackberry handset. Youth generation, like student and teenagers enjoy using the Blackberry messenger, which gives the company a new segmentation market. The company can use various effective marketing strategies to target the youth generation and basic entry level smart phone customer in India, by offering discount price strategy in India. The purpose is to encourage more subscribers to join Blackberry and gain more market share in India.
4.2 INTERNAL ANALYSIS TO INDENTIFY CURRENT STRENGTHS AND WEAKNESSES IN THE MARKETING STRATEGIES OF RIM
Organisation, like RIM should assess its internal analysis to identify its core strength and limitation in the marketing strategies.
The core competence of Blackberry handset comes from its business software for the business people. The IT specialists like to use its ‘Blackberry Enterprise Server’. The server allows IT administrators to enforce various policies on the handset. Therefore, the company is able to block the multimedia features like the camera and music player and also restrict the certain website accessibilities by its employees. (Morisy. M, 2008). It can be seen that RIM is successful to meet the IT and online security requirement for organisation that require the high level of IT control.
On the other hands, the weaknesses of RIM can be found on the company marketing strategy towards the smart phone, Blackberry itself. The company announced the new Blackberry 10 will be launched on 31 January 2013. The plan was initially set on before June 2012. It showed that the company may not well prepare for its new innovative smart phone. According to the CEO of RIM, ‘The timeline has shifted to (this date) and is related to the large volume of software code to work through over the last few months’ (www.techradar.com)
The speed of new product development is slow. It can unpleasantly bring negative publicity to the company as a whole. The public and investors may question the effective strategy marketing of the company as a whole.
Besides this, it shows that the company may not manage its marketing strategy properly. The CEO of RIM stated that, ‘This is taking more time than anticipated. The change in timeline is not related to architecture, but the integration challenge of bringing all this code our diligent R&D teams have created and get it ready for use globally.’
The news indicates the lack of integration, communication and expertise in the company among the various departments like marketing, research and development, human resource, financial department and so on.
4.3 PROPOSAL ON STRATEGIC MARKETING RESPONSES IN RIM’S MARKETING STRATEGY TO KEY EMERGING THEMES IN THE NATIONAL AND INTERNATIONAL AVIATION MARKET
They are plenty of big corporation serve the global consumers since many decade ago. Many companies operate international marketing and they are very knowledgeable on the consumers around the world. They aim to seek for more profit opportunities and reduce the sole dependence on only one market. Most of the time, the organisations tend to focus only on their profit and neglect the responsibilities on the local communities. Therefore, there has been increasing calls from general public to force companies to involve in a high level of corporate social responsibilities (Kotler, 2008). Company must evaluate whether they are truly practising ethical and socially responsible marketing (Kotler, 2008, 706)
It is significant that RIM, as one of the global film, to show its social corporate responsibilities through its strategic marketing strategy, as found on the company website under corporate responsibility column:
‘RIM is committed to global sustainability by improving the economic, social and environmental impacts of our day to day operations. RIM teams implement programs across the organisation to identify, execute and measure sustainable initiatives.’ (www.rim.com)
There are various methods RIM can practise the social responsible marketing while doing the business. For example, RIM must aware not to offend the general public or racial group in their advertisement. The company must carefully select actors who do not show negative publicity or religion sensitivity issue.
Besides this, RIM should use the sustainable materials to assemble and manufacture its handset. The materials used should be harmless to human health and safety. RIM shou
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