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Reclaiming the SmartPhone Market
M. Brent EasonBen FurrCarrie MartinelliAdam Scott
RIM Confidential
— ROUND 1 —BACKGROUND INFORMATION
RIM Confidential
ORGANIZATION OVERVIEWS
▪ Founded 1976 as Apple Computer
▪ 2009 Revenue: $42.91 billion
▪ 2009 Net Income: $8.24 billion
▪ Employees: 34,300
▪ Founded 1984
▪ 2009 Revenue: $11.1 billion
▪ 2009 Net Income: $1.89 billion
▪ Employees: 12,000
RIM Confidential
PRODUCTS
▪ BlackBerry product first launched in 1999
▪ Wide range of Wireless Service Providers (AT&T, Verizon, Sprintand all major global providers)
▪ 41 Million units sold in 2009
▪ 80+ Million units currently in use globally
▪ Introduced in 2007 with AT&T as the exclusive provider
▪ 3G version launched in 2008 with high-speed data
▪ 3GS version launched in 2009 with faster data throughput rates,higher resolution camera and updated OS
▪ 43 Million units sold as of Jan. 2010
RIM Confidential
CUSTOMER PROFILES
iPhone CustomersData From CrunchGear.com
— July 13, 2008
▪ 72% Male▪ Average Age 31 ▪ 31% 15-24 ▪ 32% 25-34 ▪ 31% 35-49 ▪ 6% 50+▪ 58% College Education (43% Nat’l Avg)▪ 43% Reside in NY or CA (Twice the Nat’l Avg)▪ Average HHI $75,600 (26% over Nat’l Avg)
RIM Confidential
CUSTOMER PROFILES
BlackBerry Prosumers
▪ 64% Male▪ Average Age 24▪ 46% College Education▪ Average HHI $59,200
▪ Unique smartphone that may be used as both a businesstool and a non-business (prosumer) device
▪ Allows IT professionals the ability to deploy and maintainend users efficiently with the BB Enterprise Server
RIM Confidential
EXTERNAL ANALYSIS
KEY INSIGHTS
▪ Competition from iPhone has forced BlackBerry devices to support morefeatures– LBS, downloadable applications, higher resolution camerasand touchscreen technology.
▪ BlackBerry sales for business use are increasing, however, prosumersales are not having the same success.
▪ Enterprise (Business) activations increased 14% in 2009
▪ Prosumer activations increased 12% in 2009
RIM Confidential
INTERNAL ANALYSIS
KEY INSIGHTS
The cost of new feature implementation has increasedover the past 3 years to keep pace with the iPhone:
▪ Estimated R&D cost to implement BlackBerry Maps is $14 per device in 2009 compared to $11 per device in 2008
▪ Estimate R&D cost to implement BlackBerry Pushcast feature is $16 per device for 2010
RIM Confidential
— ROUND 2 —THE RESEARCH PROBLEM
RIM Confidential
MARKETING PROBLEM
LAGGING MARKET KNOWLEDGE▪ Evolution of smartphone customer segmentation
(i.e. business users » personal users)
LAGGING R&D EFFORTS▪ Rapidly shifting consumer preferences and higher expectations
(i.e. mass customization) require greater feature offeringsand speed to market
RIM Confidential
OUR RESPONSE
Carefully analyze customer preferences andcharacteristics in order to better define customer
segments, determine which customers tofocus marketing efforts on, and what features
are most important to those customers.
RIM Confidential
BUSINESS IMPLICATIONS
TARGETING & POSITIONING
PRODUCT DEVELOPMENT
PRICING & PROMOTION
BOTTOM LINE: Sales, Profit, and Market Share
RIM Confidential
DEVELOPING OUR RESEARCH
CONSIDERATIONS▪ Is the question too broad or too narrow?
▪ Is there sufficient data to be collected? Multiple perspectives?
DV = PURCHASE INTENT
INDEPENDENT VARIABLE SET CRITERIA▪ Unbiased (not sample specific)
▪ Useful and mostly significant (legitimate, predictive ability) ▪ Largely guided by background knowledge
▪ Manageable for both respondents and ourselves
RIM Confidential
— ROUND 3 —DATA DESCRIPTION
PRIMARY▪ Exploratory Survey: “How Smart is Your Phone?”
▪ Follow-up Survey
SECONDARY▪ RIM/BlackBerry Marketing Presentation:
“iPhone vs. BlackBerry” — January 2009
▪ Mintel Reports (NCSU Library source)
RIM Confidential
DATA SOURCES
RIM Confidential
HOW SMART IS YOUR PHONE?
SURVEY STRUCTURE Eligibility Check
Information About Existing Phone
DEPENDENT VARIABLE ▪ How likely are you to make your next phone a BlackBerry?
▪ This structure creates bias with the wording. A numerical scale from 1-5
or 1-7 would be ideal.
General Phone Preferences
Demographic Information
Not atall likely
SomewhatUnlikely Undecided Somewhat
LikelyVery
Likely
RIM Confidential
HOW SMART IS YOUR PHONE?
INDEPENDENT VARIABLES
▪ Phone-Related:
“How important is voice quality/clarity in a cell phone?”
“Do you prefer a physical keyboard or a touch screen?”
▪ Demographic:
“What best describes your education level?”
“What is your marital status?”
RIM Confidential
QUESTION BREAKDOWN
ELIGIBILITY CHECK & EXISTING PHONE INFO
#1: Do you own or have exclusive use of at least one phone?
▪ If NO, exits survey
#2: Did you choose your phone, or was it issued to you for your job?
#3: Which company provides your cellular service?
#4: What kind of device do you currently use?
▪ Separates smartphone users from others.
#5: Did you purchase your current phone because of a promotional
discount?
RIM Confidential
QUESTION BREAKDOWN
PHONE AND TECHNOLOGY PREFERENCES
#6: Which type of phone offers the best value for the money?
#7: If price or availability were no object, which would you most prefer to use/own?
▪ The above two questions have three possible answers:
▪ BlackBerry
▪ iPhone
▪ Neither/Other
#8: How likely are you to make your next phone a BlackBerry?
▪ This is our primary dependent variable.
▪
▪
▪
RIM Confidential
QUESTION BREAKDOWN
PHONE/TECHNOLOGY PREFERENCES CONT.
#9: If you do not currently use a Smartphone, what one thing wouldmost make you purchase one?
Required for Work, Cheaper, User Friendliness, Smaller/Stylish, NOTA
#10-13: Importance of…
Voice Network
Data Network
Not at All � Somewhat � Highly � Most
#14: Do you prefer a physical keyboard or a touch screen?
• Style/Color
• Features/Applications/Games
•
•
RIM Confidential
QUESTION BREAKDOWN
FINAL TECH QUESTIONS & DEMOGRAPHICS
#15: Which kind of computer do you use most frequently?
MAC, PC, Both/No Preference
#16-20: Demographics:
Gender
Age Range
Educational Level
A
Marital Status
Children
RIM Confidential
HOW SMART IS YOUR PHONE?
POSITIVES Acceptable number of responses
Questions provide enough data to run initial analysis
LESSONS LEARNED Scaling of questions not broad enough
Not enough demographic questions
Respondents are in our acquaintance circle
▪ Does this create a problematic bias?
RIM Confidential
SURVEY VERSION #2
▪ Respondents: Existing Only or Brand New Set?
▪ Garner specific wording and scaling from more experienced marketing professionals
▪ Focus on demographic data for segmentation and clustering
▪ Complete by mid-April
▪ Pull ideas from secondary data to allow for best possible comparativequalities
SECONDARY DATA
PORTIO RESEARCH
Tactical Positioning: iPhone vs. BlackBerry
▪ Background information for our marketing analysis
▪ SWOT analysis of iPhone and BlackBerry
▪ Opinions from Industry Experts
RIM Confidential
SECONDARY DATA
MINTEL REPORTS▪ Based on Primary and Secondary Data
▪ Customer Base Information
▪ Preference Studies
▪ Market Forecasts
▪ Customer Segmentation
RIM Confidential
SECONDARY DATA
HOW WILL WE USE IT?▪ To improve original survey
▪ Validate results from primary data
RIM Confidential
— ROUND 4 —ANALYSIS PLANS
RIM Confidential
ANALYSIS PLANS
CLUSTER ANALYSIS▪ Identify meaningful customer segments
DISCRIMINANT ANALYSIS▪ Profile each segment demographically
REGRESSION ANALYSIS▪ Identify significant factors affecting smart phone choice
RIM Confidential
ANALYSIS PLANS
CLUSTER VARIABLES▪ Phone/service features
▪ Price/promotion responses
DISCRIMINANT VARIABLES▪ Demographics
▪ Lifestyle characteristics
Results will be used to form targeting and positioning decisions.
RIM Confidential
DEPENDENT VARIABLE▪ Likelihood of choosing BlackBerry
INDEPENDENT VARIABLES▪ Phone Features / Service Ratings
▪ Demographics
▪ Price/Promotion Response
▪ Lifestyle Characteristics
REGRESSION ANALYSIS
RIM Confidential
▪ Run Stepwise Regression to eliminateinsignificant variables
▪ Check for Multicollinearity with aTolerance Value of .10
▪ Investigate Curvilinear Effects andInteraction Effects
REGRESSION ANALYSIS
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