Term paper

Of

Product and brand management

Topic:- Marketing plan for RIM( Blackberry) introducing laptop

Submitted by

HEERA LAL

Roll no. RR1803B43

University registration no.-10803260

Submitted To

Mrs. Anju Saini

Lect. L.S.B.

DEPARTMENT OF MANAGEMENT

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA

Table of contents:

1. Executive summary

2. Situation analysis

a). Category definition

b).Category analysis

c). Company and competitor analysis

d). Customer analysis

e).Planning assumptions

3. Objectives

4. Product/Brand strategy

5. Supporting marketing programs

6. Financial documents

7. Monitor and controls

8. Contingency plans

1. Executive Summary

This is marketing plan for RIM, as they are looking to extend their product line. Research In

Motion (RIM) is the company behind the BlackBerry® brand. The innovative and award-

winning BlackBerry product line includes best-in-class smartphones, as well as software for both

enterprises and small businesses.

The integration of BlackBerry smart phones and software provides mobile access to email,

applications and more. It also allows virtual real-time communication, so you can stay in touch

and up-to-date with the people and things that matter most.

In addition to BlackBerry smartphones and software, RIM develops intuitive and advanced

technology that provides a faster typing experience and allows you to do more with your

BlackBerry smartphone.

RIM is planning to introduce new product “GLORY” laptop to extend its product line.

The demand for laptops is increasing and the demand of Dekstop PC is decreasing day by day.

The marketing strategy is based on strong quality of product delight to target market. GLORY

will focus on it’s availability of product, competitive pricing and greater value than competitors.

Our marketing objective is to actively support continuous growth and profitability through

effective implementation of the strategy. We will follow market penetration strategy here. We

will introduce many models of laptops, which will help us in generating revenue in less time.

2.Situation analysis:

a). Size of IT industry:

The size of India's IT industry has grown significantly over the years. The size of this sunshine

industry of India grew from 150 million US Dollars to 50 billion US Dollars between 1990-1991

and 2006-2007. The growth of the IT industry has been very high in the last few years. The size

of the Information Technology industry of India was 5.7 billion US Dollars in 1999-2000. After

the turn of the century the industry experienced exponential growth to reach the 50 billion mark

by 2006-2007.

The size of the IT industry grew consistently during the period - 1995-2000

1995-1996 - 1224 million US Dollars

1996-1997 - 1755 million US Dollars

1997-1998 - 2670 million US Dollars

1998-1999 - 3900 million US Dollars

1999-2000 - 5700 million US Dollars

2000-2001 - 8750 million US Dollars

According to the NASSCOM- McKinsey report on the IT industry of India, the projected

revenue of the IT industry of India for the year 2008 is 87 billion US Dollars. The projected

exports or the year 2008, accord to this report, is 50 billion US Dollars.

Some of the important aspects of the NASSCOM- McKinsey report related to the size of India's IT industry are –

There is potential of 2.2 million people being employed in the IT industry of India by the end of

2008.

Contribution of software and services to the total GDP of India will be more than 7.5%.

FDI (Foreign Direct Investment) of 4.5 billion US Dollars expected in the IT industry by the end

of 2008.

35% of total exports from India will be from IT exports.

225 billion US Dollars worth of market capitalization from IT shares.

b). Growth of IT industry:

The projections about the size of India's IT industry present a very optimistic picture. The

industry is expected to grow to double its current size by the year 2012. India's IT industry is

expected to grow at an annual average rate of 18% in the next five years. The industry is also

expected to cross the 100 billion US Dollar mark by 2011. One of the major areas of growth for

the IT industry of India is by tapping the potential in the domestic market. The IT industry of

India is largely dependent on the export market. Penetrating more into the domestic market

would create further opportunities of growth for the IT industry.

The NASSCOM - McKinsey report on India's IT industry

According to a NASSCOM-McKinsey report, annual revenue projections for India’s IT industry

in 2008 are US $ 87 billion and market openings are emerging across four broad sectors, IT

services, software products, IT enabled services, and e-businesses thus creating a number of

opportunities for Indian companies. In addition to the export market, all of these segments have a

domestic market component as well.

India IT Software and Services Industry

US$ billion

Other key findings of this report are:

Software & Services will contribute

over 7.5 % of the overall GDP

growth of India

IT Exports will account for 35% of

the total exports from India

Potential for 2.2 million jobs in IT by

2008

IT industry will attract Foreign

Direct Investment (FDI) of U.S. $ 4-

5 billion

Market capitalization of IT shares

will be around U.S. $ 225 billion

c). Product life cycle for laptops:

The Product Life Cycle

The product lifecycle looks at the various stages of a products sales history. Depending on the

stage that product is at, it will help determine the potential opportunities and also problems with

respect to your marketing strategy.

The Product Life Cycle is an important part of the external analysis, part of writing a business

plan. A product, like people go through a life cycle. They grow (in sales), then decline and are

eventually replaced by another product. This is especially important for companies in that the

majority of products will eventually become obsolete as their sales volume and market share

become replaced by new and improved products or technology. Bear in mind also that as a

product ages its profitability will also generally decline. So as a company if your products are not

changed or replaced, sales volume is at risk.

Demand and Technology

To fully understand and utilise the product lifecycle it is helpful to understand the concept of it.

A product exists to provide a solution to meeting a consumer’s need. You must, as a company,

decide when you exit one product and move to the new ‘demand technology’.

The need for a product is constantly changing and can provide us with a demand life-cycle curve.

From the chart you can see that there is a new demand or consumer need – a Demand Cycle.

This demand cycle once it has emerged, grows over a period of time until it reaches maturity and

then declines.

A product comes in that will fill that consumer need (See the black new technology line)

As new technology comes in it will start to satisfy that need (See the black new technology line).

As that technology starts to ‘slow’ you will see the next advanced product come into play and

will eventually bypass the previous technology (see the purple new technology line). So the

process continues. If you think how computers have developed over the years since their

conception you can appreciate this concept.

What this chart highlights is that you need to constantly look at the bigger picture within your

market – look for the technological advances and keep up to date with the market. If your

product is in the maturity or decline market – what do you need to be doing to stay ahead.

For laptops PLC:

As laptops are highly technology sensitive, so demand for them will be continuously their.

Therefore Laptops in India are currently enjoying a stage between growth and maturity. Laptops

with advanced technology are coming with passage of time, so they will not reach maturity stage

so early. As from graph, its clear that laptops are somewhere between growth and maturity stage.

So there are a lot of scope still left for our product.

Growth Phase:

Here we will look to maximise our market share. Strategies includes offering product

extensions, things such as servicing and warranties. We will be looking to price our product to

enable it penetrate the market. Extensive distribution will be needed and we will need to be

building awareness and interest in our product within the mass market. Sales promotion will be

less here than in the introduction phase as we will be taking advantage of the heavy consumer

demand.

d). Sale cyclicity and seasonality:

Sale cyclicity for laptop is average. It indicates category is attractive for investment.

e). Seasonality:

Laptop market is not generally affected by seasonal variation. It is quite stable having demand

throughout the year, which again indicates the category is attractive for investment. However

there is increase in sale during some festivals time due to discount etc. being provided by saler.

Overall market is stable.

f). Profits:

Profits in IT industry are generally good. When you come with new technology, you can come

with marketing skimming strategy easily to earn more profit. Only negative side here is

obsolescence of technology rapidly. Overall category is attractive.

B. Category factors:

Michael Porter provided a framework that models an industry as being influenced by five forces.

The strategic business manager seeking to develop an edge over rival firms can use this model to

better understand the industry context in which the firm operates.

 

SUPPLIER POWER

Supplier concentration

Importance of volume to supplier

Differentiation of inputs

Impact of inputs on cost or differentiation

Switching costs of firms in the industry

Presence of substitute inputs

Threat of forward integration

Cost relative to total purchases in industry

 

BARRIERS

TO ENTRY

Absolute cost advantages

Proprietary learning curve

Access to inputs

Government policy

Economies of scale

Capital requirements

Brand identity

Switching costs

Access to distribution

Expected retaliation

Proprietary products

THREAT OF

SUBSTITUTES

-Switching costs

-Buyer inclination to

 substitute

-Price-performance

 trade-off of substitutes

 

BUYER POWER

Bargaining leverage

Buyer volume

Buyer information

Brand identity

Price sensitivity

Threat of backward integration

Product differentiation

Buyer concentration vs. industry

Substitutes available

Buyers' incentives

DEGREE OF RIVALRY

-Exit barriers

-Industry concentration

-Fixed costs/Value added

-Industry growth

-Intermittent overcapacity

-Product differences

-Switching costs

-Brand identity

-Diversity of rivals

-Corporate stakes

Diagram of Porter's 5 Forces

 1. Rivalry

In the traditional economic model, competition among rival firms drives profits to zero. But

competition is not perfect and firms are not unsophisticated passive price takers. Rather, firms

strive for a competitive advantage over their rivals. The intensity of rivalry among firms varies

across industries, and strategic analysts are interested in these differences.

In case of IT industry rivalry is strong among existing players. So competition will tough for us.

2.Threat of New Entrants

Threat from new entrants in low due as this industry needs highly capital intensive. Large

investments required to enter in the market. and it is very difficult to arrange so much finance so

easily. So industry is attractive.

3. Bargaining Power of Buyers

Bargaining power of buyer is more here, as there are number of competitors. So customer can

switch to anyone of them. So we have to come with some unique features for our laptop, so

customer will prefer our laptop over others.

4. Bargaining Power of Suppliers

Bargaining power of supplier here is just more than average. Though there is good demand for

IT product, but in the mean time there are numerous supplier also, who wants to market there

product.

5. Pressure from Substitutes

Pressure of substitutes is less in case of laptops, as there are not perfect substitutes for laptops

still available. So our product can generate revenue for us with good pace.

Capacity:

Capacity of IT laptop market is not fully utilized. So there are chances for our product.

C. Environmental Factors

Economic factors:

This is one factor which will affect IT industry most. As India has been one of the best

performers in the world economy in recent years, but rapidly rising inflation and the

complexities of running the world’s biggest democracy are proving challenging.

India’s economy has been one of the stars of global economics in recent years, growing 9.2% in

2007 and 9.6% in 2006. Growth had been supported by markets reforms, huge inflows of FDI,

rising foreign exchange reserves, both an IT and real estate boom, and a flourishing capital

market.

Like most of the world, however, India is facing testing economic times in 2008. The Reserve

Bank of India had set an inflation target of 4%, but by the middle of the year it was running at

11%, the highest level seen for a decade. The rising costs of oil, food and the resources needed

for India’s construction boom are all playing a part. India’s Economy has grown by more than

9% for three years running, and has seen a decade of 7%+ growth. So India is good market place

for our product .

Technological factor:

The technology has a major impact on the business.  It affects the business prospects, cuts down

the profits and forces the management to change the course of the business operations. Any

change in technology changes the work cultures, the methods and the systems.  It affects the

speed of the operations and gives a boost to the productivity of the production systems. It makes

your product useless if technology goes outdated. There are so rapid advancement in computer

technology in recent time, which poses strong challenges for our product. We have to compete

with rapid technology change. The transfer of technology is essential for attaining a high level of

industrial capability and competitiveness. Multinational corporations are playing an increasingly

important role in technology transfer because they invest abroad to expand production,

marketing and research activities. There is also a growing consciousness amongst governments

of the need to increase technology transfer to the developing countries to help stabilize their

economic and social conditions.

Social factors and Legal factors :

Social factors are generally encouraging in case of laptop industry. Trend is in favour of this in

industry.

Various legal formalities regarding entry in the market create some problems. But they are not so

serious.

C. COMPANY AND COMPETITOR ANALYSIS

Research In Motion (RIM) is the company behind the BlackBerry® brand. The innovative and

award-winning BlackBerry product line includes best-in-class smartphones, as well as software

for both enterprises and small businesses.

The integration of BlackBerry smartphones and software provides mobile access to email,

applications and more. It also allows virtual real-time communication, so you can stay in touch

and up-to-date with the people and things that matter most.

In addition to BlackBerry smartphones and software, RIM develops intuitive and advanced

technology that provides a faster typing experience and allows you to do more with your

BlackBerry smartphone.

As company is going to launch its laptop as product extension, so all major laptop producer will

become its direct competitor.

Major competitor:

• Acer - TravelMate, Extensa, Ferrari, Aspire

• Apple - MacBook, MacBook Air, MacBook Pro

• ASUS - Asus Eee, Lamborghini

• Compaq - Evo, Armada, LTE, Presario

• Dell - Inspiron, Latitude, Precision, Studio, Vostro, XPS, Studio XPS

• Fujitsu - LifeBook, Stylistic

• Gateway

• Hewlett-Packard - HP Pavilion, HP Omnibook, HP Compaq Notebooks

• Lenovo - ThinkPad, IdeaPad, 3000 series

• Panasonic - Toughbook, Satellite, Let's Note (available in Japan only) [1]

• Samsung - SENS

• Sony - VAIO

• Toshiba - Dynabook, Portege, Tecra, Satellite, Qosmio, Libretto

Competitors strategy:

There are four classic price/selling effort strategies:

Selling

Effort

Price

Low High

Low Necessity GoodsClassic Skim Strategy

Vulnerable to new entrants

High Classic Penetration Strategy Luxury Goods

All competitor are coming with appropriate strategies, which suits their mission and vision

objective. Basically they are following one or mix. Of more than one, strategy from above

matrix.

D. CUSTOMER ANALYSIS

Customers & Potential Customers:

All youth and corporate user will be our potential customers. We will try to offer the product

matching the need of each individual specifically.

Segmentation of customers:

It will be based on following factors:

Pricing

Professional

Youth

High technology loving

E. PLANNING ASSUMPTIONS

The sales are expected to grow at the current market growth rate.

Technology will not completely obsolete in near future.

3). Objectives

Corporate Objective

The corporate objective is to provide quality at a competitive price, growth in diversity, and

continue to contribute in local market by being the market challenger so enhancing the

profitability of business.

Divisional Objective

To deliver superior quality and value to all its customer.

Marketing Objectives

To sell 800 units per month, so total 9600 units in year 2010-11 in each of city entered.

To attain quantitative and qualitative leadership in the sectors.

Maintain constant positive sales growth every year than the other competitor.

Increase the market share by market development.

To modify the existing market areas.

To increase product awareness as well as sales by persuasive promotional activities.

4). Product/Brand Strategy

Target Market

The potential markets are separated into two segments; “Corporate User” and “End User”. The

primary marketing opportunity is selling to these well defined and accessible target market

segments that focus on investing discretionary income in these areas:

Corporate User: Corporate users are the users who bye the NOTEBOOK for their official

purpose only. The MD, GM, DGM, CEO are the main corporate lavel users.

End User: End users are the users who buy the NOTEBOOK for their personal use. Teachers of

University, Students of private University, businessman etc are the End users.

Competitor target:

Acer

Compaq

Dell

Hewlett-Packard

Lenovo

Strategic alternative:

Penetration strategy:

Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a

large, if not dominant market share.

This strategy is most often used businesses wishing to enter a new market or build on a relatively

small market share.

This will only be possible where demand for the product is believed to be highly elastic, i.e.

demand is price-sensitive and either new buyers will be attracted, or existing buyers will buy

more of the product as a result of a low price. A successful penetration pricing strategy may lead

to large sales volumes/market shares and therefore lower costs per unit. The effects of economies

of both scale and experience lead to lower production costs, which justify the use of penetration

pricing strategies to gain market share.

We will also use this strategy for marketing of our laptop.

Market development:

A market development strategy involves selling present products or services in new markets.

Managers take actions like targeting promotions, opening sales offices and creating alliances to

operationalize a market development strategy. We also want to expand the market for our

product, so we will also follow this strategy.

Positioning

Our laptop will acquire good position in market . The position will be achieved by quality

product, competitive price, and according to consumer’s demand and delight consumers.

Strategies:

Cost/price (value) strategy:

We will try to offer product at appropriate price,so customer can get value for their money.

Consumer awareness:

Our main primary marketing strategy will seek to first create customer awareness regarding the

products.

Our other marketing strategy are-

Practicing Total Quality Management (TQM)

Consumer Orientation

Produce and market international standard products

To increase the product line and length as per the expectations of the consumers

To serve the consumer with competitive prices

To ensure the availability of the product

5). Supporting marketing programs:

Our product marketing mix is comprised of the following approaches to price, distribution,

advertising and promotion, and customer service.

Product

Brand Name

Variety

Quality

Design

Price

List Price

Discount

Allowance

Promotion

Advertising

Personal Selling

Sales Promotion

Place

Channels

Coverage

Assortments

Location

Marketing Mix

PRODUCT

Brand name

The brand name of our product is “GLORY”.

Product variety

GLORY has five types of product. These are-

S451U-T5600, S451U-T2080, S552U-T2450, S451U and S552U.

Quality

GLORY will always maintain high quality of its products. Total Quality Management (TQM)

will be practiced here.

Design

Attaractive Design, Colors, Comfortable weight.

Features

Our product has a Variety of features.

Packaging

“GLORY” will supply its laptops to the users in attractive packaging. It will provide special

cartoon to send the laptops to its dealers.

Size

The products size will vary a little to product to product.

Service

“GLORY” provides after sales service for its products.

PROMOTION

Sales promotion

RIM will provide short-term incentives to encourage and purchase or sale of its products.

Occasionally it will give special discounted price for its products. We will also give T-shirts,

caps, Bluetooth etc. to the customers.

Advertising

We will give advertisement for “GLORY” laptop through newspaper, billboard, popular

magazine, leaflets, sponsoring on game competition, internet etc.

Personal selling

Initially we will go for personal selling also.

PRICE

List price

Price list of GLORY:

ITEM PRICE

S451U-T5600 64,999.00

S451U-T2080 52,999.00

S552U-T2450 55,999.00

S451U 43,999.00

S552U 43,999.00

Discount

We will allow discount facilities for our retailers and dealers.

Payment period

RIM will also sell on credit to its distributors and retailers and after the sale they will make the

payment. The payment time is one month.

PLACE

Channels

RIM has its own channel for distribution of the products.

Distributor

RIM has its own distribution channel for distributing the products.

Location

Initially GLORY centers will covers main cities of country to sale the products.

Transport

“Glory” has no its own transport facility for its distributors. Distributors are responsible for

taking the products to their showrooms.

Marketing Research

Research is very important for any company to know about current market and predict future

needs.

Information is collected through the dealer and retailer through questionnaire.

Question – It will help us in knowing customer responses like as “How did you hear about

product?”. Based on the answer we will take our promotional activities.

Customer suggestion – We will take customers suggestions to gain additional information. We

want to know from the customers about-

What suggestion do you have to improve our product?

Why do you need a laptop? Etc.

6). Financials

This section will offer the financial overview of GLORY laptop, related to marketing activities.

It will address break even analysis, sales forecast, expense forecast, and indicate how this

activity are link to the marketing activity.

Break-even Analysis

The break-even analysis below illustrates the number of single sales, or units, that we must

realize to break-even. This is based on average sale and costs per transaction.

Monthly Break-even Point

Break-even Analysis:

Monthly Units Break-even 700 Unit.

Monthly Revenue Break-even Rs. 3,64,00000

Assumptions:

Average Per-Unit Selling Price Rs. 52,0000

Average Variable Cost per month Rs. 42,000

Estimated monthly Fixed Cost Rs. 70,00,000

Sales Forecast:

GLORY estimates that the sales forecast will be achieve into the into the five main revenue

streams; S451U-T5600, S451U-T2080, S552U-T2450, S451U and S552U. It will steadily

increase sales as the advertising budget allows, although the target market forecast listed all of

the potential customers divided into separate groups. The forecasted customers group divided

into 2 categories: Corporate Users and End Users.

Monthly Sales forecast

Graph analysis:

Months Sales(Rs.)

July 3,50,00,000

August 3,45,00,000

September 2,75,00,000

October 5,25,00,000

November 4,40,00,000

December 3,80,00,000

January 2,90,00,000

February 5,40,00,000

March 4,35,00,000

April 2,50,35,000

May 2,01,00,920

June 3,75,00,000

Sales Forecast:

Sales 2010-2011 2011-2012

S451U-T5600 6,35,98,800 8,06,38,320

S451U-T2080 6,23,99,040 7,39,20,000

S552U-T2450 7,91,98,200 9,12,00,000

S451U 7,91,98,200 7,48,80,000

S552U 8,06,38,560 11,99,97,600

Total Sales(Rs.) 36,50,32,800 44,06,35,920

Cost of Goods Sold 2010-2011 2011-2012

S451U-T5600 5,38,79,040 6,04,78,740

S451U-T2080 4,99,19,232 5,54,40,000

S552U-T2450 6,33,58,560 6,84,00,000

S451U 6,33,58,560 5,61,60,000

S552U 6,45,10,848 8,99,98,200

Total Sales(Rs.) 29,50,26,240 33,04,76,940

Expense Forecast

Marketing expense is to be budgeted at approximately 3% of total sales for 2010-11 and 4% for

2011-12. Expenses are tracked in the major marketing categories of newspaper advertisements,

printed leaflets, billboard promotional event and others.

Marketing expense budget

Marketing Expense Budget 2010-2011 2011-2012

News paper 65,00,000 90,00,000

Handbills/Leaflets 7,00,000 10,00,000

Magazines 5,00,000 10,00,000

Internet 17,50,000 30,00,000

Billboard 15,00,000 36,25,000

Total marketing expenses 1,09,50,000 1,76,25,000

Implementation

The following identifies the key activities that are critical to our marketing plan. It is important

to accomplish each one on time and on budget.

Milestone

July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June

Newspaper Yes Yes Yes Yes Yes Yes Yes Yes - Yes Yes -

Billboard Yes Yes Yes Yes Yes Yes Yes Yes - - - -

Internet Yes - Yes Yes Yes - Yes Yes Yes Yes Yes Yes

Magazine - - - - Yes Yes Yes Yes - - Yes Yes

Handbill/

Leaflets

Yes - Yes Yes - Yes - Yes Yes Yes Yes -

7). Marketing organization

Chief marketing officer deals with the marketing department of RIM. The marketing department

needed to maintain its professional integrity above and beyond the specific partners, looking out

for our marketing goals and implementing the marketing programs as best fits of the strategy.

Monitoring

Monitoring of objectives will be done to check out whether we have achieved them till now and

to check out the effectiveness of market support programs. Also, whether the sales target which

we had established has been achieved or not. If not, then what might be the possible reasons?

Following tools will be used to monitor the performance and effectiveness of marketing

programs:

Sales Updates

Trend Report

Spot Tests

Controlling

The root cause of any deviation (if there) will be thoroughly studied and necessary corrective

actions would be taken to ensure that organizations marketing objectives are achieved.

Performance of the company as well as individual would be evaluated on the basis of targets

achieved by the organization as well as by the individual.

8). Contingency planning

Contingencies likely to arise:

Failure to attract customer by the new brand

Failure of financial plan

Company’s Strategy to deal with the same:

Creating value preposition and continuous updating of product

Communicating value to the customer

Extra money in liquid form for contingency.

Bibliography:

References to book:

Product management 4e-tatamcgraw-hill

References to web pages:

http://www.indianembassy.org/indiainfo/india_it.htm

http://www.businessweek.com/adsections/indian/infotech/2001/growth.html

www.economywatch.com › Business And Economy

http://www.writing-a-business-plan.org/Product-Life-Cycle.html

http://www.sales2.com/index.php/articles/sales-management/297-what-is-a-sales-cycle

www.openlearningworld.com/.../Technological%20Environment.html

http://www.exporthelp.co.za/modules/1_considering_exporting/env_technological.html

http://en.wikipedia.org/wiki/List_of_laptop_brands_and_manufacturers

http://tutor2u.net/business/marketing/pricing_strategy_penetration.asp