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Research project for MBA Marketing Analytics course.
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Reclaiming the SmartPhone Market
M. Brent EasonBen FurrCarrie MartinelliAdam Scott
RIM Confidential
▪ Founded in 1984
▪ First BlackBerry launched in 1999
▪ 2009 Revenue: $11.1 billion
▪ 2009 Net Income: $1.89 billion
▪ Employees: 12,000
BUSINESS INFORMATION
RIM Confidential
TARGET MARKET
PROSUMERS
▪ Non-business user
▪ RIM BIS Application – Customers are given access to an email
account comparable in speed/features as BES is for enterprise users
▪ Feature based segment – fast email, text, MMS, web browsing
and BB exclusive PIN to PIN messaging (very fast and secure)
▪ BlackBerry has 20% of the current smartphone market share and
losing ground in this customer segment
RIM Confidential
KEY COMPETITORS
▪ Strong competitor in the prosumer customer segment – 15% of current smartphone market share
▪ Advantages: Brand awareness and variety of application downloads
▪ Disadvantages: Price point and limited to AT&T GSM network
▪ Low cost OS with open development
▪ Advantages: Scalable and flexible – functions on a variety of smartphones
▪ Disadvantages: Low adoption and low number of available apps (both arerapidly increasing)
▪ Overall, serious threat to both the iPhone and BlackBerry in the next 12-16 Months
RIM Confidential
MARKETING PROBLEMS
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 offerings and speed to market
BUSINESS IMPLICATIONS▪ Targeting and Positioning, Product Development, Pricing & Promotion
▪ Bottom Line: Sales, Profit, and Market Share
RIM Confidential
RESEARCH STRATEGY
OBJECTIVECarefully analyze customer preferences and characteristics in order to
better define customer segments, determine which customers to focus
marketing efforts on, and what features are most important to those
customers.
PRIMARY DATA▪ Exploratory Survey: “How Smart is Your Phone?”
▪ Follow-up Survey
RIM Confidential
RESEARCH STRATEGY
ADVERTISE!
RIM Confidential
RESEARCH METHOD
COLLECTED SURVEY DATA www.surveymonkey.com
▪ 346 of 421 Respondents completed survey end to end▪ 73 Respondents excluded – did not pass eligibility check, therefore not
in the Prosumer market▪ 2 Respondents did not finish the rest of the survey and were excluded
SURVEY LIMITATIONS▪ Time Constraint - Sampling was not a perfect representation,
could have been larger ▪ Survey Length - 24 questions, would’ve liked more to capture more
critical data but there were concerns about the impact on participation
RIM Confidential
SURVEY STRUCTURE Eligibility Check
Information About Existing Phone
DEPENDENT VARIABLE ▪ How likely are you to make your next phone a BlackBerry?
INDEPENDENT VARIABLES ▪ Usage Information
▪ Feature Preferences
General Phone Preferences
Demographic Information
▪ Demographics
▪ Psychographics
DATA COLLECTED
RIM Confidential
SAMPLE DEMOGRAPHIC PROFILE
Female 46.2% 160
Male 53.8% 186
GENDER
18-24 3.2% 11
25-29 23.1% 80
30-34 27.5% 95
35-39 14.2% 49
40-44 10.1% 35
45-49 3.8% 13
50-54 8.1% 28
55+ 10.1% 35
AGE
Yes 70.2% 243
No 29.8% 103
MARITAL STATUS
Did not graduate high school 0.0% 0
High School Diploma 0.3% 1
Technical school or some college 2.9% 10
2-year college degree 2.6% 9
4-year college degree 47.1% 163
Masters 42.5% 147
PhD 4.6% 16
EDUCATIONYes 48.6% 168
No 51.4% 178
CHILDREN
1 15.0% 52
2 43.1% 149
3 18.8% 65
4 19.7% 68
5 2.9% 10
More than 5 0.6% 2
# HH MEMBERS
Urban 25.1% 87
Suburban 64.7% 224
Rural 10.1% 35
RESIDENTIAL TYPE
Full-time student 3.2% 11
Engineering 6.9% 24
Construction/Physical labor 1.4% 5
Information Technology 16.2% 56
Medical/Health Services 4.3% 15
Sales/Marketing 12.1% 42
Financial Services 11.8% 41
Education 6.6% 23
Retail/Hospitality 2.0% 7
Public/Emergency Services 0.0% 0
Artist/Musician/Designer 0.6% 2
Science/Biotechnology 7.5% 26
Government/Legal 5.8% 20
Self-Employed/Consultant 4.3% 15
Media/Journalism 0.3% 1
Non-Profit/Social Services 2.0% 7
Homemaker 2.6% 9
Retired 0.9% 3
Unemployed 1.4% 5
Other 9.8% 34
OCCUPATION
less than $50,000 10.1% 35
$50,000 - <$75,000 16.5% 57
$75,000 - <$100,000 15.9% 55
$100,000 - <$125,000 14.7% 51
$125,000 - <$150,000 9.8% 34
$150,000 - $200,000 13.9% 48
More than $200,000 6.4% 22
Prefer not to say 12.7% 44
HH INCOME
▪ All 346 Respondents▪ Satisfactory Spread, Very close to Prosumer profile
RIM Confidential
ANALYSIS METHODS
REGRESSION ANALYSIS▪ Identify significant factors affecting smart
phone choice
CLUSTER ANALYSIS▪ Identify meaningful customer segments
DISCRIMINANT ANALYSIS▪ Profile each segment demographically
RIM Confidential
STEPWISE REGRESSION
Q#7 - Please choose how often you currently use the following features of your CURRENT CELL PHONE on a scale of 1-7:
Parameter Estimate
P-Value Tolerance
Frequency of use of Calendar/Reminders
0.10564 0.0032 0.60985
Frequency of use of Free Add-on Games or Apps
-0.09581 0.02 0.53927
Frequency of use of Music Playback
-0.21721 <.0001 0.6389
Q7
Q#5 - Please rate the order of importance of the following in your initial choice of PERSONAL CELL PHONE, on a scale of 1-7
Parameter Estimate
P-Value Tolerance
Price/Promotional discount 0.09651 0.0185 0.91478
Ability to Play Music -0.11165 0.0052 0.67424
Importance of Touch Screen -0.22011 <.0001 0.60131
Q5
Q#3 - Please rate the order of importance of the following in your choice of WIRELESS CARRIER,on a scale of 1-7:
Parameter Estimate
P-Value Tolerance
Brand Availabilty -0.14299 0.0003 0.76136
Data Availabillity 0.20886 <.0001 0.76505
Phone Pricing 0.07273 0.0849 0.99019
Q3Q#8 - On a scale of 1-7, please indicate how frequently you intend to use the following features on your NEXT CELL PHONE. These features may or may not be available on your current phone.
Parameter Estimate
P-Value Tolerance
Frequency of use of Calendar/Reminders 0.109 0.0041 0.60378
Frequency of use of Purchased ($$) Add-on Games or Apps -0.1323 0.0024 0.6863
Frequency of use of Music Playback -0.1534 <.0001 0.66558
Q8
Q#10 Generally, where do you look for information when purchasing technology products? (You may choose more than one answer but must choose at least one.)
Parameter Estimate
P-Value Tolerance
Internet – Retailer website (Binary Variable) 0.24198 0.0838 0.98292
Magazines – Hi-Tech (Binary Variable) -0.65675 0.0116 0.98897
Q10
Q#19 How would you best characterize the area in which you live?
Parameter Estimate
P-Value Tolerance
Suburban Area (Binary Dummy Variable) -0.2624 0.0851 0.99849
Q19
Q#20 Which kind of computer do you use most frequently?
Parameter Estimate
P-Value Tolerance
Other PC - Windows or Linux (Binary Dummy Variable) 0.58534 0.0039 0.99849
Q20
RIM Confidential
CLUSTER ANALYSIS
Cluster Frequency
Standard Deviation (How close people are related to each other
inside cluster)
Maximum Distance from
Seed to Observation
Nearest Cluster
Distance Between Cluster
Centroids
1 49 1.3338 14.8592 3 7.1202
2 69 1.2066 14.1314 6 7.4241
3 42 1.188 14.7218 1 7.1202
4 62 1.2817 12.8745 1 7.5641
5 61 1.3117 14.6057 2 8.5896
6 29 1.3239 15.3594 2 7.4241
7 34 1.2864 13.6458 3 7.4825
Cluster Summary
RIM Confidential
CLUSTER MEAN
1 4.844 4.895 4.03Average of the Others 3.72
CLUSTER MEAN
1 2.844 3.185 2.49Average of the Others 1.79
CLUSTER ANALYSIS: NARROWING FOCUS
#Q11. How likely are you to choose a "smart"
phone the next time you buy a personal cell
phone? (Continuous Scale 1-5)
#Q12. How likely are you to make your
next phone a BlackBerry, specifically?
(Continuous Scale 1-5)
RIM Confidential
CLUSTER MEANS: PREFERENCES
#Q3. Please rate the order of importance of the following in your choice of WIRELESS CARRIER? (Continuous Scale 1-7)
1 4 5Brand Availability* H M MVoice Quality H H HVoice Availability H H HData Speed H H MData Availability* H H MService Plan Price H H HPhone Price* H M H
ClusterPreference
(1-3=Low, 3-5=Mod, 5-7=High, * Correlation w/ Linear Regression)
RIM Confidential
CLUSTER MEANS: PREFERENCES
#Q5. Please rate the order of importance of the following in your initial choice of PERSONAL CELL PHONE? (Continuous Scale 1-7)
1-3=Low, 3-5=Mod, 5-7=High
* Correlation w/ Linear Regression
1 4 5
Brand Reputation H M MVoice Clarity H H HEmail* H H MStyle/attractiveness H M MPrice/Promotion* H M HTech. Integration H M MEase of use H H HPhone Size H M HBattery Life H M HInternet H H MMusic* M L LVideo M L LPictures H M MGPS M M MQWERTY keyboard H H MTouch Screen* M M M
PreferenceCluster
RIM Confidential
CLUSTER MEANS: PREFERENCES
#Q7. Please choose how often you currently use the following features of your CURRENT CELL PHONE? (Continuous Scale 1-7)
(1-3=Low, 3-5=Mod, 5-7=High * Correlation w/ Linear Regression)
1 4 5
Call M H HText H H HEmail* H H LCalendar* H M LWeb Brow sing H H LSocial Netw orking M M LPurchased Apps L L LFree Apps* M L LCamera H M MVideo L L LMusic* L L L
ClusterPreference
RIM Confidential
CLUSTER MEANS: PREFERENCES
#Q8. How frequently you intend to use the following features on your NEXT CELL PHONE? (Continuous Scale 1-7)
(1-3=Low, 3-5=Mod, 5-7=High * Correlation w/ Linear Regression)
1 4 5
Call H H HText H H HEmail* H H HCalendar* H H MWeb Brow sing H H MSocial Netw orking H M MPurchased Apps* L L LFree Apps H L MCamera H M MVideo M L LMusic* M L L
PreferenceCluster
RIM Confidential
CLUSTER MEANS: PREFERENCES
#Q10. Generally, where do you look for information when purchasing technology products? (Binary Variable)
(1-3=Low, 3-5=Mod, 5-7=High * Correlation w/ Linear Regression)
1 4 5
In-Store Promo Displays M L MIn-Store Sales Rep M M MInternet-manufacturer's w ebsite M M MInternet-retailer's w ebsite* M M MInternet-review websites* H H HInternet-social media websites L L LInternet-technology w ebsites M M MMagazines-High Tech* L L LMagazines-Lifestyle L L LNewspapers L L LTelevision L L LWord of Mouth H H H
PreferenceCluster
RIM Confidential
DISCRIMINANT ANALYSIS
1 4 5
Male? 0.45 0.67 0.45
Age: 1(18) - 8(55+) 3.2 4.2 3.9
Education: 1(HS) - 6(PhD) 4.4 4.4 4.4
Married? 0.55 0.75 0.78
Children? 0.25 0.51 0.55
# HH Members 2 3 3
Surburban? 0.57 0.67 0.69
Urban? 0.27 0.24 0.22
Mac? 0.05 0.07 0.05
PC? 0.93 0.84 0.84
Emotional Spender? (1-7) 4.0 3.6 3.8
HH Income: 1(<$50K) - 7(>$200K) 3.1 4.5 3.5
Mostly Spend? (0-7) 3.8 3.8 4.0
ClusterDemo/PsychographicsCLUSTER #1
▪ More likely younger▪ Less likely married, children,
suburban▪ More likely a PC owner
CLUSTER #4▪ More likely male▪ Higher income
CLUSTER #5▪ Very similar to Cluster #4
except balanced sex and lowerincome level
RIM Confidential
DISCRIMINANT ANALYSIS
CLUSTER #1▪ Mostly IT Professionals▪ Somewhat Financial and Education
CLUSTER #4▪ Mostly Sales/Marketing and
Financial Professionals▪ Somewhat IT
CLUSTER #5▪ Most Diverse▪ Somewhat Science/Biotech and
Sales/Marketing
1 4 5
Artist/Musician/Designer 0.02 0.00 0.02
Science/Biotechnology 0.07 0.04 0.13
Government/Legal 0.09 0.05 0.04
Self-Employed/Consultant 0.00 0.05 0.02
Media/Journalism 0.02 0.00 0.00
Non-Profit/Social Services 0.00 0.00 0.07
Homemaker 0.00 0.00 0.05
Retired 0.00 0.00 0.02
Unemployed 0.00 0.00 0.04
Full-time student? 0.07 0.02 0.02
Engineering 0.05 0.07 0.05
Construction/Physical labor 0.00 0.04 0.00
Information Technology 0.23 0.15 0.09
Medical/Health Services 0.07 0.04 0.05
Sales/Marketing 0.09 0.20 0.16
Financial Services 0.11 0.22 0.05
Education 0.11 0.05 0.04
Retail/Hospitality 0.00 0.02 0.04
Occupation: 0(N) - 1(Y)Cluster
RIM Confidential
CLUSTER LABELING
Cluster #1: “Hi-Tech Prosumer” ▪ High value on most phone and network features ▪ High current and expected use of most phone features ▪ Unwilling to pay a high price to get features ▪ Lowest income level ▪ Youngest
Cluster #4: “Typical BlackBerry Prosumer” ▪ High preference for most network features ▪ Moderate preference for most features (voice clarity, email, ease of use, battery life, QWERTY) ▪ High use of call, text, email, and web browsing ▪ Doesn’t use or plan to use apps, music, or video
Cluster #5: “Basic Prosumer” ▪ High value on voice quality/availability, price, ease of use, phone size, and battery life ▪ High use of call and text ▪ Low use of all other features ▪ Plan to increase use of email, calendar, web browsing, apps, and camera with next phone ▪ Cluster likely to converge with cluster #4 over time
RIM Confidential
TARGET MARKET SELECTION
Age 30's
Sex 50/50, M/F
Income 75K - 125K
Education Bachelor's or Master's Degree
Job IT, Sales, Finance
Married Yes
Household 2 to 3 people
Residence Suburbs
Computer PC
Current Phone BB or non-smartphone
Current Provider Verizon
Type of Shopper Balances wants and needs, moderate spender
KEY DEMOGRAPHICS
RIM Confidential
TARGET MARKET SELECTION
PREFERENCE or USAGEIMPORTANCE or
INTENTION
Wireless Carrier - Voice Quality HIGH
Wireless Carrier - Voice Availability HIGH
Wireless Carrier - Service Plan Price HIGH
Personal Cell Phone Preferences - Voice Clarity HIGH
Personal Cell Phone Preferences - Ease of Use HIGH
Intend to Use - Voice Calling HIGH
Intend to Use - Text Messaging HIGH
Intend to Use - Email HIGH
Marketing Channel - Web Review Sites HIGH
Marketing Channel - Word of Mouth HIGH
KEY PREFERENCES
PREFERENCE or USAGEIMPORTANCE or
INTENTION
Current Cell Phone Use - Purchased Apps LOW
Current Cell Phone Use - Video Playback LOW
Current Cell Phone Use - Music Playback LOW
Intend to Use - Purchased Apps LOW
Marketing Channel - Social Media Sites LOW
Marketing Channel - High-Tech Magazines LOW
Marketing Channel - Lifestyle Magazines LOW
Marketing Channel - Newspapers LOW
Marketing Channel - Television LOW
KEY PREFERENCES
OTHER FINDINGSSomewhat Important: In-Store Sales Rep, Manufacturer's website, Retailer's website, IT websites
RIM Confidential
PROBLEM: MARKETING KNOWLEDGE
PROMOTION ▪ Overwhelming majority use Review Websites which is shown to have
a significant negative effect in our linear regression analysis. We need to find a way to improve BB image on review websites.
▪ Word of Mouth also very significant with target market.
▪ Ineffective: Paper advertising (i.e. newspapers or magazines), social media, website advertising, and TV ads
PLACEMENT ▪ User Distribution = AT&T 34%, Verizon 49% ▪ BB in 550 Wireless Carriers worldwide and 175 Countries, AT&T 34%, Verizon 49%
PRICE ▪ Logical, moderate spender - Value Pricing Model ▪ Must lower price to stay competitive: iPhone is $199 for 16GB, Storm2 is $199GB for 8GB ▪ Service Plan Pricing is also critical to target. Must work with wireless providers to offer various competitive packages
RIM Confidential
PROBLEM: R&D EFFORTS
PRODUCT
Primary Intended Usage: Call, Text, Email, Web (Basic Stuff!)
R&D Focus ▪ Improve OS (i.e. ease of use and speed) ▪ Improve Email Features ▪ Improve Voice Clarity ▪ Extending battery life ▪ Development of FREE apps ▪ Minor Focus: GPS, Touch Screen
Not Important ▪ Development of Purchased apps ▪ Music Playback ▪ Video Playback