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					Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
______________________________________________________________________________
                         Motorola: China Experience*

This news was unsettling but expected for Brian Lu, the General Manager of Motorola China's

Personal Communication Sector.          He had just received a report on the most updated market

analysis. The report was on the intensifying of market competition in the Chinese cellular

phone industry and stressed the emerging Chinese brands, among which TCL is the current

leader. TCL is eating shares from all of the international brands including Motorola.             He knew

the Chinese government's policy of promoting local companies over their international

counterparts, and this report confirmed a fear that he had had since he was promoted to his

current position.

    Brian understood that Motorola, as the number one foreign import/export company in China,

was in a unique situation. Through the creation of complete locally sourced production and

development, Motorola had established a strong infrastructure and developed powerful

relationships in China. He now wondered, what was Motorola's best strategy to take advantage

of their company's previous development?             The company needed a plan of action and he

decided to arrange a meeting to discuss how Motorola should react to these local brands and

overall market competitive pressures.


                                        Company Background

Motorola was founded by Paul V. Galvin in Chicago, Illinois, in 1928.     Under the leadership of Robert W.

Galvin, Paul’s son, Motorola expanded into international markets in the 1960’s and began to switch its focus

*
  This case was prepared by Eric Berken and Yanhua Dai Michael Pendleton and Aaron Tennant of the               Formatted
Fox School of Business and Management at Temple University under the supervision of Professor
Masaaki Kotabe for class discussion rather than to illustrate either effective or ineffective management of a
situation described (2003).
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       Group #3 Yanhua Dai & Eric Berken                                                        Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
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from the previously dominant consumer electronics market it had targeted.          The company sold its color

television receiver business, which then allowed it to concentrate energies on high-technology endeavors in

commercial, industrial, and government fields.     By the end to the 1980s, Motorola had become the leading

worldwide supplier of cellular phones.    Following a merger with General Instrument Corporation, Motorola

became a leader in cable modems and set-top terminals.       This allowed the company to become a leader in

chip system level technology, harnessing the power of wireless, broadband, and the Internet.     Motorola is the

first company to offer wireless always-on access to the Internet through its use of General Packet Radio

Service (GPRS) protocol technology.      As an industry leader Motorola has continued to grow and in 2001 the

company had worldwide sales of $US 30 billion.


                                               Motorola China

Motorola entered China in 1987 when it opened its first office in Beijing under the name of Motorola China

Electronics Ltd.   In 1992, it set up the Motorola (China) Electronics Ltd. in Tianjin and began to produce

beep-pager, mobile phone, two-way radio, wireless communications facilities, semiconductor, automobile

electronics etc. The products not only are sold in China but also are distributed to world markets.   Through its

early production of beep-pager, mobile phones, and two-way radios, wireless communications, semiconductors,

and automobile electronics, the company has become the biggest foreign-import export company in China

(according the Chinese edition of Fortune), now Motorola is the biggest foreign electronic company, the

biggest American company and the most successful foreign company in China.

        Motorola China utilizes local sourcing in a “win-win or two + three + three” development strategy to

make China its local home and development base in Asia.      Motorola's China operations consist of one wholly

owned factory, one holding company, eight joint ventures, 18 R&D facilities and 26 sales offices.       Motorola

China employs a total of 13,000 people.    The company’s integration and sales goals are being driven by R&D

centers, management training, and joint venture partner assistance that have established the company’s ability

to develop, enhance, and distribute products to local consumers.    The overall goodwill created by Motorola’s

efforts to produce completely in China have insured the companies continued development in China’s complex
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       Group #3 Yanhua Dai & Eric Berken                                                              Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
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consumer and business markets.

          Motorola China’s specific “two + three + three" is the company’s clearly defined approach for the

future.    The "Two" means to turn China into both a global production base and a research and development

base of Motorola. Now, the production base of Motorola in Tianjin has two parts: semiconductor production

center and Asian communications production base.          Motorola has also decided to build a research and

development base in China taking Beijing as the center.    In the coming 5 years, Motorola will increase US$1

billion R &D fees and recruit 4,000 research fellows. By that time, Motorola's total R&D investment in China

will reach US$1.3 billion.   The 1st "Three" means three US$10 billion: by the end of 2006, an annual output

value of US$10 billion in China; by the end of 2006, a total investment of US$10 billion in China, including

investment from strategic business partners like joint venture partners and suppliers; an accumulated US$10

billion purchasing of accessories and services from China in the coming 5 years.    The other "Three" means

laying great emphasis on the development of digital trunking and iDEN, semiconductors and broad brand

besides wireless communications, and making the 3 operations the new profit increase points of Motorola.

     Motorola has taken various measures to implement the "two + three + three" strategy, which include

adjustment of the company's worldwide manufacturing capacity, the decision to increase R&D investment in

China, the establishment of a software center in Chengdu, and plans of the Energy Systems Group to establish

its Asian design and procurement headquarters in Shanghai.

     A major factor in Motorola’s expansion is its utilization of joint venture partners to implement the

infrastructure to develop outlets for its products. Joint contracts with China Mobile and companies like Cisco

and Nortel Networks have allowed Motorola to expand into the vast Chinese markets.       These contracts have

given Motorola access to 21 Chinese provinces of which 14 have contracts to deploy Motorola's systems and

municipalities including Beijing, Tianjin, Zhejiang, Sichuan, Hunan, Jiangxi and Liaoning.     These ventures

allow the company to focus on its expertise in developing and distributing cell phone technology and products,

while the network infrastructures are handled by other companies with expertise.

     Motorola is currently the industry leader in China based on its first mover status.     Motorola entered


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          Group #3 Yanhua Dai & Eric Berken                                                      Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
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China at a prime time when mobile communications was still a novel idea and no one was selling it. As a result,

the company enjoyed ten years of success in selling its pagers as tens of millions of Chinese, at that time,

wanted to carry one for convenience and a symbol of social status.      Riding on that momentum and a strong

emphasis on design and marketing, Motorola's handsets hold the largest market share in China (estimated at

28.9%) as its brand is often associated with best in quality, features and form factor.   China is arguably the

most important market in the world for Motorola, as Motorola has been less optimistic about its future in the

rest of the world.   For these reasons, Motorola has announced plans to increase investment in China to $10

billion (cumulative) by 2006.

                                             Market Structure

The Chinese government regulates and implements its national telecommunications infrastructure through

China Telecom and the China United Telecommunications Corporation (UNICOM), both state-owned

corporations. This duopoly market is still closed to foreign wireless service providers, such as AT&T.     Since

the government-controlled China Telecom and UNICOM do not have big motivation to explore the market,

they either charge new subscribers high initial fees or provide prepaid wireless service to consumers.      This

strategy makes cell phone usage somewhat less attractive to consumers, even though the initial fee has been

dropping from as high as US$1000 ten years ago to the current rate of US$50.         This has caused cell phone

manufacturers to usually promote their products independently rather than bundle the cell phones with wireless

services.

     The cellular phone industry in China is going through the growth stage of the industry life cycle.   As the

countries market continues to grow rapidly, barriers to entry are being lessened, as the government and its

people want to assure the advancement of the industry.     Overall the market is currently at around 180 million

subscribers, number one in the world, with expectations of 300 million subscribers by 2003.     This is currently

only a 13.9% penetration rate, which is lower than average, as compared with all other major cell phone

markets.    This early industry life cycle stage’s strong growth potential is what makes China such an attractive

market for expansion.

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       Group #3 Yanhua Dai & Eric Berken                                                           Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
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     The geography and buyer power of the market, although initially centered in the east is expanding

throughout China.     Wealth plays a key role in the current distribution of sales, as the Eastern region accounts

for 53.8% of China’s current sales. However, the Central region at 22.5% and the West region at 23.75% are

fast expanding, giving distributors opportunities to enter fresh markets over the next decade.

Distributors: These are the sources for companies to deliver their products throughout the market.              The

primary distributors are the state funded network and the larger distributor networks throughout the Asia

Pacific.    A key government network, sponsored by China Mobile, is a key network as it sells and distributes

other brands.    Another strong channel is companies like CellStar and Bright Point which are the world's

leading global providers of innovative, value-enhancing logistics services to the wireless communications

industry.    Another channel outlet is the smaller private exclusive distributorship agreements, which Motorola

does not depend heavily on.    These partner combinations are important for companies who depend on them to

get their products to the ever-expanding market regions.

Wireless Service Providers: There are two service providers for wireless access in the Chinese market: China

Mobile, which provides 69% of service; China Unicom, which provides the remaining 31% of service.            China

United Telecommunications Co., Ltd. was formed in 1994 under a government directive to break up the

monopoly held by China Mobile.        In May 2002, the old China Mobile was ordered by the government to

break into two operating entities, where China mobile will retain the original corporate identity and operate in

21 provinces and municipalities in south China.            Despite this apparent attempt by the government to

strengthen competition in the market, both have strong government ties.        These ties, and the duopoly created

by this situation has caused for a lack of competition to lead to severe price imbalances for consumers.

Because of their dominant positions it is imperative that cell phone distributors form alliance with these

providers to enhance the distribution of their products.

Retailers: The retail distribution for the cell phone is severely fragmented, but consolidating with industry

growth and expansion.     As mentioned previously, because of its dominant position, China Mobile serves as a

major distributor for cell phone technology producers.      Major department stores and retail outlets (ex. Tristar)


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       Group #3 Yanhua Dai & Eric Berken                                                              Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
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provide another key outlets for distribution.      There is no one way to get products to consumers, as no one

company has access to all of the markets in the nation, so providers must develop relationships with many

types of outlets to gain market advantage.       This is changing as the larger outlets and suppliers are buying up

smaller retailers to consolidate their retail capabilities.


                                                    Competition

Due to the large size of the Chinese cell phone market and its potential for long-term continual growth,

competition for access to China’s consumer markets is intense.         Competitive threats from Nokia, Siemens,

Samsung, and local producers like TCL are a cause for concern within Motorola.              However, eighty-four

percent of Chinese consumers prefer foreign mobile phones to local models, with Motorola, Nokia and

Ericsson being their favorite makers, according to a nation-wide survey conducted by the China

Telecommunications Association and Eaglewings Public Relations.              For this reason, Motorola’s biggest

competition for cell phone supremacy would likely appear to come from foreign companies outside of China.

     China’s aforementioned government structure plays an interesting role in the assumption that foreign

companies will maintain dominance.          As is traditional, the socialist government hierarchy prefers for a

majority of any industry to have local majority control.      The government, which controls the operations of the

service provider sector and is a dominant player in distribution channels as well, has the means to make this

goal a reality – quickly.   For this reason, Motorola must not only utilize shorter-term strategies to find a way

to grow market share, but long-term change strategies to find a way to compete with government powered

locally owned firms.




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       Group #3 Yanhua Dai & Eric Berken                                                              Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
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                    Figure1: Market Share of Chinese Cell Phone Market
                                 (as of 3rd Quarter, 2002)



                                      Samsung TCLSiemens
                                                                                       Motorola
                          Nokia         7%    7% 5%
                                                                                       Nokia
                          26%
                                                                                       Samsung
                                                              Others                   TCL
                                                               26%
                                                                                       Siemens
                               Motorola
                                29%                                                    Others




Nokia: Nokia of Finland opened its first office in Beijing in 1985.     By the end of 2001, Nokia invested a

total of 2.3 billion euro (nearly $2 billion) in China and established itself as a leading supplier in handset

market. The company has 22 local offices, eight joint ventures and a research center, with 5,500 employees.

Nokia is the second largest handset supplier in China after Motorola, with 25.7% in market share.   Nokia has

definite strengths in designing and R&D with major economies of scale benefits, due to its world market

leadership.   It has used this leadership to quickly develop relationship with major distributors in China.   A

major drawback appears to be that the standardization benefits it enjoys does not reflect the interest in new

differentiated products that consumers want out of new growth products.

Samsung: In 1997 Samsung was selected to supply test CDMA systems in Shanghai. Since then, the

Korean company has begun its expansion into the telecommunications market.        Samsung's core competence

is in three areas: research and development (R&D), manufacturing, and sales and marketing.             Product

leadership is established through vertical integration and strategic alliances.   Samsung wireless products

enjoy a unique synergy through vertical integration within Samsung Group.          This synergy results from

leading-edge components available from Samsung Group's sister companies, including Samsung

Electro-Mechanics and Samsung SDI.       In addition, synergy is enhanced by sharing internal resources with


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       Group #3 Yanhua Dai & Eric Berken                                                          Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
______________________________________________________________________________
Samsung Semiconductor, Samsung Multimedia Division, Samsung Telecommunication Systems Division and

others.     Samsung is an extremely diversified company and does not maintain a clear focus on cellular phone

products in particular.

Siemens: Siemens began selling telecom product to the Chinese as early as 1872 (a manual telegraph

receiver). In 1994, this German company began its formal China operations with products and services in

communications, automation and control, medical equipment, energy, power transmission, transportation and

lighting. Siemens China provides sales, human resources, purchase, financing and strategy development for its

diverse businesses, which include telecom products and related services. Together, Siemens China has more

than 40 manufacturing facilities and 28 local offices; it has invested more than $500 million in China (total)

and employs 21,000. Total sales for the 2001 fiscal year was 3.5 billion euros ($3.2 billion), up 49% from a

year ago, in which revenue from mobile communications equipment was 13.5 billion yuan ($1.6 billion),

according to the latest information.   Recently the company invested $250 million in 2002-03 to expand R&D

centers in Beijing, Shanghai and Singapore.

Ericsson: Ericsson of Sweden began selling in China as early as 1892. It returned to China in 1985, and

formed limited China holdings in 1994. To date, Ericsson has ten joint ventures, four wholly owned

subsidiaries and 26 sales offices in China, employing some 4,500. According to the company, its investment in

China has exceeded $600 million, one of the largest among foreign telecom companies.        Since 1998, China

has become Ericsson's single largest market in the world, annual sales (including export) are estimated at $1.7

billion.    Ericsson has become deeply involved in China, as the telecom market in the world is slowing down

and competition fierce in sectors such as cell phone handsets while China market is still growing fast.

Ericsson's handset sales in China, used to be a flagship for the company, has been in sharp decline since 1999

due to strong competition and more selective customers. In August 2001, Ericsson and Sony form a joint

venture for handset manufacturing which would fill the void Ericsson left in handset manufacturing in China.

Ericsson has positioned itself to attain new sells by focusing its advertising toward the young female

demographic and distributing products with more advanced specialized features.        Ericsson appears to be


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           Group #3 Yanhua Dai & Eric Berken                                                      Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
______________________________________________________________________________
focusing on niche marketing for cell phones, because of its overall lack of company specialized focus for the

cell phone market.    The small sales force that Ericsson employs in China seems to be comfortable with its

smaller niche positioning, for now.

Locals & Others: Here is where competitive pressure coming from smaller local firms that the government

may champion exists.     With over 33% of the market coming from these firms, with local medium size players

like TLC at 6.8%, competition is fierce and severely fragmented.             Motorola had kept an eye on these

producers in the past, as threat of competitor buyouts and consolidation had always been a concern.          Now,

Motorola was faced with the more imposing threat that, with government support, the smaller local brands

could take away the company’s dominant market position.


Motorola’s Competitive Adjustment

CCID, a consulting firm under the Ministry of Information Industry, showed that Motorola had a leading

market share of 28.7% in the mobile phone industry as of April 2002.         Market analysts attribute this success

to the company’s brand reputation, flexible product strategy, and considerate after sales service.    Through the

launch of high quality stylized phone products and “Total Solution Service Centers” in every major city market,

Motorola has positioned itself as a desired local product brand that provides optimal value throughout its

relationship with customers.     The company knows that it is not guaranteed of continued market leadership,

but feels by creating such a strong market infrastructure they have positioned themselves in the Chinese market

for the long haul.   Motorola continues to feel that its decision to produce locally and develop strong bonds

with local suppliers and distributors is its best bet to maintain a strong position in the country.


                                                   Consumers

By the end of October 2002, China became the largest cellular market in the world with a total

number of 180 million cell phones in use. The number reached 220 million by the end of 2002.

According to the data from China Mobile and China Unicom, the cumulative number of

subscribers has increased by an annual rate of more than 50% from 1998 through 2002.
                                                                                                             M-9

       Group #3 Yanhua Dai & Eric Berken                                                              Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
______________________________________________________________________________
                                         Figure 2: Growth In Subscriber Base

          Subscribers
           (In Million)
                   250
                                                                                                  220


                  200



                                                                                     144
                  150




                  100                                                  87.6



                                                           43
                   50
                                            24.7
                                12

                    0
                             1997         1998         1999         2000          2001         2002
                    Year




        The stereotyped image of cell phone owner - “affluent boss” – has long faded.                        While

this may describe one of the segments still targeted by cell phone manufacturers, today’s user

symbolizes the blending of tastes, preferences and meanings associated with products crossing

several demographics and psychographics boundaries. A discussion of the 4 market segments

that defines today’s cell phone user follows.

Heavy Users: They are successful entrepreneurs, businessmen/women, or professionals aged older than 30,

with higher income.       People in this segment view cell phones as a necessary tool for their jobs.    Most of

them are early adopters of mobile phone.      It’s easy for them to stick to one brand because they are unwilling

to spend time in getting used to new menus.        Therefore, this segment is much more loyal in certain brands

with reliable quality, compared to the other three segments.     They are willing to pay extra money for high

                                                                                                             M-10

       Group #3 Yanhua Dai & Eric Berken                                                              Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
______________________________________________________________________________
quality.

Technology Enthusiasts: This segment is male dominated, highly educated, aged between 25 and 45.           They

are eager to try every hi-tech gadget, and always seek new cell phones with either cutting-edge technology

embedded or unique functions.        Consumers falling into this category are more likely to try some fantastic

accessories connecting cell phone and other personal digital devices, such as laptop and PDA, as well as make

advantage of the wide usage of cell phone like wireless access to the Internet.

Fashion Seekers: Most consumers in this segment are young female aged 20 to 40 who love and can afford

trendy apparel.       They care more about the appearance of cell phone, such shape, size and color, than

diversified functions.     TV commercials featuring appropriate celebrities usually have a significant influence

on the purchase behavior of this segment.     Both this segment and Technology Enthusiasts have the propensity

of changing their phones frequently.       Therefore, products targeting these two segments have a relatively

shorter life cycle.

Social-Life Lovers: This is not a “richer” segment.       Regarding demographics, these people are consumers

with average income, either man or woman, without age limit.      They like to make friends and care about their

families.   Cell phone is a perfect tool for them to keep in touch with both friends and family members.

However, they may not be attracted to cell phones with comprehensive and sophisticated functions at relatively

higher prices.    People in these segments are much more price-sensitive than those in the above three segments.

They’re usually patient to wait for sales promotions in order to get good deals.    From this point of view, the

profit margin of cell phones targeting this segment is the lowest in the four categories.    However, with the

increasing number of people owning a cell phone, this segment is expanding rapidly and makes more and more

contribution to the growth of the entire market size.

                                             Motorola’s Strategy

When wireless service was available in 1987, Motorola was the sole provider of both network equipment and

cell phone based on analog technology.           As the first company to introduce the concept of mobile

communication into China, Motorola has been enjoying very solid brand recognition in this market.

                                                                                                          M-11

       Group #3 Yanhua Dai & Eric Berken                                                           Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
______________________________________________________________________________
Entry Mode - Greenfield Operation. Viewing China as an emerging market with great

potential, Motorola chose “greenfield operation” as its entry strategy when it set up the first

office in China in 1987. The rationale behind this choice of entry mode can be described as

follows:

       First, Motorola’s pursuing an overall global strategy decides a high-control entry mode.

Since cell phone industry is highly concentrated with a limited number of players who confront

each other in many different national markets around the world, a wholly owned foreign

subsidiary allow for Motorola’s global strategic coordination.

       Second, due to the relatively low investment risks in China, Motorola chose greenfield

operation which involves substantial resource commitments.           Since China reopened its

economy to foreign investors in 1979, the country has been gaining experience in attracting

foreign investment.   Investment incentives and infrastructure supports in Special Economic

Zones and Open Cities (including Tianjin where Motorola’s wholly owned factories are located)

motivates foreign firms to adopt high control equity-based entry modes.

       Finally, though the demand in China for mobile phone was low in the first few years,

market potential was great in terms of a huge population and increasing consumer purchasing

power especially in cities along the coast.   Since at that time cell phone was newly introduced

into Chinese market and the rapid growth period didn’t start until a few years later, Motorola had

enough time to establish a wholly owned subsidiary from the scratch.

       Since established in 1992, the manufacture plant in Tianjin (a port in Northern China),

which is 100% owned by Motorola, has become one of the major global production bases in the

world for personal communication products, including cell phone. The initial time and capital

                                                                                             M-12

      Group #3 Yanhua Dai & Eric Berken                                               Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
______________________________________________________________________________
invested in the factory by Motorola have been already paid off. The Tianjin factory not only

provides products to Chinese market and other countries in Asia, but also consolidates

Motorola’s relationship with both central and municipal governments, as the factory has been

one of the 10 companies with the largest exports and sales since 1994.

Operation - Localization Strategy.    Knowing that consumer preference in the Chinese market is

quite different from that in the U.S. market, Motorola started to localize its product development

after the initial poor performance of pure “global” strategy.    Now Motorola adapts its models to

meet the specific demand from local markets rather than simply throw the current products into

the market without any adjustment.     The R&D center in China successfully developed software

to show the menu in Chinese and input Chinese characters.                In 1999, a combination

PDA/phone, which was designed by Chinese engineers, was launched in China and spread to the

US and European countries.

       Motorola’s localization strategy also includes local sourcing.         The company takes

initiative in establishing relationships with local suppliers.   7 years ago, 65% of components

were imported, while 69% of components are purchased locally now.            Local sourcing brings

Motorola three major benefits: lowering manufacturing cost, reducing risks from currency

fluctuation, and catering to Chinese government’s requirements.

Marketing Segmentation. Regarding branding strategy, Motorola introduced four sub-brands

to respectively target the 4 market segments:          Timeport to Heavy Users, Accompli to

Technology Enthusiasts, V. to Fashion Seekers, and TalkAbout to Social-Life Lovers. Different

advertisings and promotions are implemented to target these 4 specific categories, shown below:



                                                                                              M-13

      Group #3 Yanhua Dai & Eric Berken                                                Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
______________________________________________________________________________
          Figure 3:   Advertising and Promotions Targeted to Market Segments


                                Attitudes           Sub-brand        Advertisings and
                                                                       Promotions

        Heavy Users        Working hard;            Timeport    Print ads placed on upscale
                           High                                 business magazines such as
                           quality-conscious                    BusinessWeek (Chinese
                           when purchasing.                     Edition);
                                                                Direct marketing such as
                                                                sponsoring golf club;
                                                                Fostering positive
                                                                word-of-mouth.


        Technology         Heavy user of the        Accompli    Editorials in magazines;
        Enthusiasts        Internet;                            Internet marketing, including
                           Aspiring to get                      the design of Motorola’s
                           ahead.                               website.


      Fashion Seekers      Enjoying life rather     V.          Chinese super models and
                           than live frugally;                  pop music singer as
                           Associating brands                   representatives for this serial;
                           with role models                     TV commercial;
                           such as celebrities.                 Print ads in fashion
                                                                magazines such as Elle,
                                                                Cosmopolitan.


     Social-Life Lovers    Willing to pay for top   TalkAbout   Cooperating with wireless
                           brands, but will also                service providers to offering
                           wait for price drop;                 discounted initial fee;
                           Yield easily to sales                Sales promotions offering
                           promotion.                           extra accessories, such as one
                                                                more battery, or gifts.



      Although Motorola markets four cell phone serials in different ways to target different

consumer groups, the company does not invest a lot in building brand recognition of four




                                                                                               M-14

     Group #3 Yanhua Dai & Eric Berken                                                  Page
Marketing 514 – Dr. Masaaki Kotabe
Fall 2002
______________________________________________________________________________
sub-brands. The names of sub-brands only appear on the labels of the phones. Most

consumers do not seem to pay attention to the sub-brands when purchasing.


Discussion Questions

   1. How should Motorola appropriately react to the emerging local brands, head-to-head

       competing or cooperating in some fields?    Will licensing manufacturing technology to

       Chinese manufacturers weaken Motorola’s core competency?



   2. Facing the expanding low-priced segment, how should Motorola, traditionally known as

       a brand for high-end mobile phone, position itself?    Is the company’s current branding

       strategy effective in penetrating into this segment?    If not, what kind of marketing

       strategy should Motorola follow?



   3. What should Motorola do in order to effectively cut costing in developing low-priced

       mobile phone?




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      Group #3 Yanhua Dai & Eric Berken                                             Page

				
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