Research In Motion
Case Study Report
MKTG 1102 – Set K
Anne Marie Webb-Hughes
The Zen Group (Group B)
October 22, 2009
Research in Motion (RIM) will face considerable challenges moving forward. The most
relevant questions at hand for the company are, “How can RIM successfully gain a more
significant market share of the consumer market?” and, “How will RIM maintain its brand
dominance within the business market?”
RIM, founded in 1984, is the pioneer of smartphone technology and the developer,
manufacturer and marketer of the most popular portable communication device in the world, the
Blackberry. Unveiled in 1998, the BlackBerry is a truly innovative product that has changed the
face of business. In August 2009, Fortune Magazine named RIM the fastest growing company in
the world and according to British Broadcasting Corporation, RIM profits have increased by 84%
and revenues by 77% in the last three years (Fortune Magazine, 2009). Furthermore, Schonfeld
(2009) reports that 56% of all smartphones in the United States are Blackberries and the best-
selling smartphone of 2009 is the Blackberry Curve.
Despite this success and growth, RIM faces significant challenges. The greatest
challenges currently confronting RIM are maintaining its market dominance in the business
market and increasing their market share in the consumer market. While RIM holds a good
position in the business market, competition in this realm is increasing rapidly. In fact, in a
recent study conducted by J.D. Power and Associates, polling customers who use their smart
phones primarily for business purposes were polled, iPhone outclassed Blackberry (JD Power
and Associates, 2009). The results of this poll are indicative of the increased competition in the
business market for portable communication devices.
The second major issue RIM faces is its lack of market share in the consumer market.
According to Schonfeld (2009), RIM owns only 21% of the consumer market in the United
States, while Apple users represent 50% of the consumer market. Apple represents RIM’s
principle competitor, but several other manufactures are competing for market share in the
smartphone consumer market, including Palm, Microsoft, Sony, Hewlett-Packard and Samsung.
For the purposes of this marketing plan, it will be assumed that the findings of our
research, including statistics and trends, are accurate and up to date. Some of the facts mentioned
earlier pertain to the United States market. In these cases, it is assumed that findings are
somewhat representative of global trends. There are also some assumptions to be made regarding
the cost of the chosen solution, as an approximation of total cost was derived from the
information that was readily available, namely RIM’s public financial reports.
By employing the behavioural segmentation technique, which separates consumers based
on their usage of products, the target market for portable communication devices can be
separated into two major types of users. The first target market is business professionals. Our
research indicates that RIM is a well positioned brand for this particular target market. The
second major target market is the consumer market. RIM has a smaller market share of this
segment, but appears to be attempting to improve its position in this area. Moving forward, RIM
will attempt to maintain its strong position in the business market and aim to control a more
substantial piece of the consumer market.
Customer loyalty Less market share in consumer market
Brand dominance in business market Limited product line (ie only phones)
Some patents on products. Less applications than principle competitor (Apple)
Diverse product line of phones Technology is too complex for some potential users.
Award winning service Not as “trendy” as Apple
Technologically advanced Prohibitive price for some consumers.
Innovative strategies (ie industry pioneer There may be a service gap based on the product’s high
and leader) expectations and a failure to meet these expectations.
Industry-leading research and development Growth is slowing. Company may be entering
Partnerships with service providers all over Stock has not performed well recently ($92.41 on
the world (300 networks in 120 countries) September 23rd and $69.45 on October 19th – see
Involved with designing, manufacturing and
marketing of its products.
Product is used all over the world.
Room for growth in all markets, especially Relatively saturated market
Room for growth in applications and Current economic downturn
Cobranding opportunities, as seen with Patent infringement
main competitor Apple (with Oracle)
Business trends place a demand on wireless Fast-paced technological changes
Tech-savvy younger generation may be Products rely on external service providers (ie element of
more willing consumers uncertainty)
Green marketing opportunities Fierce competition
Based on research findings and market analysis, three alternative courses of action have
been identified for RIM: a product development strategy, a market development option, and a
market penetration initiative. The first marketing option for RIM to employ is a
multidimensional product development strategy. This would entail increasing the current
offering of applications for Blackberry devices, an area where Apple`s iPhone currently holds a
competitive advantage. Another aspect of this product development strategy would be a
cobranding initiative with a prominent software company such as Nintendo or Electronic Arts to
improve Blackberry`s gaming options. A third aspect of this alternative is introducing new
services such as an enhanced customer service call-centre for hardware issues and a green-
marketing initiative involving the recycling and refurbishing of used devices. Figure 1 outlines
the advantages and disadvantages of this product development strategy.
Figure 1: Advantages and Disadvantages of Alternative 1 (Product Development)
Increase market share in target markets High cost of research and development
Increase products perceived value through Time restrictions for developing software
Increase customer loyalty and improve brand image Possible brand dilution
with new recycling/refurbishing initiative
The second marketing alternative for RIM is to use a market development strategy to reach
new market segments. There is a large untapped resource of smartphone consumers in lower
income brackets that may be a lucrative market for RIM. Since the Blackberry appears to be
entering its mature stage, introducing Blackberries at more price points, specifically lower price
points, may be a profitable venture. More specifically, as RIM introduces newer models of
smartphones, the older models could be sold at discounted rates. A variation of this plan may
involve increasing product depth, whereby a new Blackberry model is manufactured, with the
same sleek image, but less advanced features. This simpler version could be then marketed to
university students, teenagers and other introductory users. See Figure 2 for the advantages and
disadvantages of this alternative.
Figure 2: Advantages and Disadvantages of Alternative 2 (Market Development)
Product is more accessible and recognizable to new Fewer functions on older phone models (possible
market segments. communication gap)
New market for pre-teens and teenagers and students Decrease perceived value of other BlackBerry
Make a profit off old outdated inventory Brand dilution
The third option available to RIM is to employ a market penetration strategy to increase
revenues from existing clientele and attract new customers from its current target market. This
would involve increased promotions and advertising. For instance, RIM could offer existing
customers discounts to family members, specifically children - the next generation of consumers.
Increased advertising, specifically online advertising at popular social networking sites, may
augment the growth potential of this plan. The relative advantages and disadvantage of this
alternative are seen in Figure 3.
Figure 3: Advantages and Disadvantages of Alternative 3 (Market Penetration)
Increased market awareness of product Potential loss of revenue from discounted items sold
Brand recognition increased Limited growth potential in existing target market
Product accessibility enhanced High cost of promotional and advertising imitatives
The chosen solution to this marketing challenge is Alternative #1, the product
development strategy. In order to more rigorously compete with Apple`s iPhone, RIM will
develop more application and software offerings for its devices. By pursuing a cobranding
agreement with a software developer such as Nintendo or Electronic Arts, the Blackberry will
gain a competitive advantage over its competition. In addition, RIM will develop a recycling and
refurbishing program, serving customers that wish to recycle their used devices, and buyers
willing to purchase used models at discounted rates. It is expected that the recycling program
will improve the brand`s image and increase customer loyalty. This marketing strategy will aim
to gain a greater market share of the consumer market, while maintaining the strong position
currently held in the business market.
The implementation of this marketing strategy will involve three major components. The
first component to be introduced is the recycling and refurbishing program. As part of this green
marketing initiative, all licensed vendors of Blackberries that wish to participate in the program
will collect old devices from consumers at existing locations. The recycled units will then be
shipped to a central location, where salvageable units will be separated and prepared for re-sale,
while unsalvageable units will be disposed of in an environmentally-sound manner.
Next, a broader range of applications and software will be developed to help increase
market share in the consumer market. To help launch this new product offering, RIM will pursue
a cobranding agreement with a to-be-determined software developer, such as Nintendo or
Electronic Arts. The new software will be available for consumers at a competitive price.
According to Wauters (2009), the majority of Apple’s highest-ranking applications for the
iPhone are priced at $0.99 and below. As such, using competitor-based pricing, the new
Blackberry applications and software upgrades will be available for download on the company’s
website at a similar price point in order to gain market share. In addition, free trial versions of
certain programs will come pre-loaded on new smartphone devices.
Promotional considerations are a critical element to this product development strategy. A
major strategic element of this particular marketing program is a commitment to establishing
RIM as a socially responsible company (as seen in the recycling initiative) and a “hip” choice for
the student or teenager that wants a cutting-edge gaming experience on his or her mobile device.
Promotional material for the green marketing campaign will appear on various media outlets,
while the application/gaming offerings will be promoted primarily online, to reach the tech-
savvy younger target segment.
The cost of this marketing strategy will encompass both research and development and
advertising. For the fiscal year ended February 28, 2009, RIM reports expenditures of $685
Million for Research and Development and approximately $1.5 Billion for Selling, Marketing
and Administration. Based on these statistics, it is anticipated that the cost of this marketing
strategy will be $20 Million ($10 Million for promotion and $10 Million Research and
Development). The goal of the marketing strategy is to meaningfully contribute to the company’s
continued growth and match last year’s reported operational income, $2.7 Billion (RIM, 2009).
Appendix 1: Percent Change in Stock Price (TSX) in Last Year (Google Finance, 2009)
Appendix 2: Course Concepts
Page Concept Usage
2 Behavioural Used to show how we interpret how we grouped Blackberry
2 Customer Loyalty Used to show how RIM retains customers
2 Product Line Used to show how products can be grouped together. In this case,
RIM has a rather limited product line because its products are very
3 Maturity Stage Used to show our understanding of the product life cycle and the
stage that RIM is approaching and the associated marketing
3 Competition Used to show one of the major challenges facing RIM is the
presence of competing firms (ie Apple)
3 Cobranding Used to show a marketing strategy that involves marketing two or
more brands together
3 Green Marketing Used to show a marketing trend that involves environmentally
friendly products or services
4 Product Development Used to show a growth strategy that involves offering a new
product to a current target market.
4 Product depth Used to show how products can be added to an existing product line
4 Market Development Used to show a growth strategy that involves offering a current to a
new target market.
5 Market Penetration Used to show a growth strategy that involves the current marketing
mix and focussing on existing customers
6 Place Used to show the relevance of place in a marketing plan, specifically
making the product accessible to consumers.
6 Competitor-based pricing Used to show a pricing strategy whereby prices are established at or
below the competitor’s prices
6 Product Used to show that marketers strive to develop a product that
customers may derive value from.
6 Promotion Used to show the importance of communicating the value of said
Dilger, D. E. (2009, April 2). RIM shares surge as BlackBerry sales hit record 7.8 million. Retrieved
October 14, 2009, from Roughly Drafted Magazine: http://www.roughlydrafted.com/2009/04/02/rim-
Fortune Magazine. (2009, August 31). 100 Fastest-Growing Companies. Retrieved October 14, 2009,
Google Finance. (2009, October 20). Chart: RIM vs AAPL. Retrieved October 20, 2009, from
JD Power and Associates. (2009, October 8). As Customer Satisfaction with Feature-Rich Smartphones
Continues to Increase,. Retrieved October 14, 2009, from
RIM. (2009, April 2). Research In Motion Reports Fourth Quarter and Year-End Results for Fiscal 2009.
Retrieved October 14, 2009, from http://press.rim.com/release.jsp?id=2248
Schonfeld, E. (2009, March 24). iPhone Makes Up 50 Percent of Smartphone Web Traffic In U.S., Android
Already 5 Percent. Retrieved October 15, 2009, from TechCrunch:
Wauters, R. (2009, May 20). Report: iPhone Applications Are Getting Cheaper. Retrieved October 18,
2009, from TechCrunch Magazine: http://www.techcrunch.com/2009/05/20/report-iphone-