Marketing Management Assessment Part 2

8/7/2019 Marketing Management Assessment Part 2

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MARKETING MANAGEMENT

University Of Wales MBA

Postgraduate program

Master of Business Administration


SALES AND AFTER SALES SERVICE CENTRE IN NIGERIA

RESEARCH IN MOTION

WORD COUNT: 2529

Written by:

ADELE

KE ADEMOLA ABIODIN

STU17164

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TABLE OF CONTENT

PAGE

1.0 OVERVIEW

3

2.0 MARKETING PLAN

3

3.0 OBJECTIVE

4

4.0 SWOT ANALYSIS

4

5.0 MARKETING STRATEGY6

6.0 MARKETING MIX

7

7.0 COST OF INVESTMENT AND ROI

8

REFRENCES

9

APPENDICES

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1.0 OVERVIEW

Marketing is very important and is a very vital part of management for any

organization to be successful in business today. All organizations share one thing

in common; they focus on identifying, serving and satisfying the needs and

wants of the customers. Philip Kotler (2002)

Every one of us is a customer in one way or the other in our various life activities

and at some time we would be at different sides of the marketing grid. Therehave been so many definitions for marketing but according to Christian Gronroos

(1989), the cornerstone of marketing is based on long term relationship. The

ability of an organization to consistently satisfy the needs of their customers will

keep the customers coming back and that will contribute immensely to the

continuous existence of the organization.

Following in the stead of an organizations strategy which answers the most

important questions of:

1) Where are we?

2) Where do we want to go? and

3) How do we get there?

Marketing strategy of an organization helps to achieve the overall strategy by

setting certain intentions and implementing them to achieve certain results. With

reference to figure 1 in the appendices, marketing management in itself deals

with the product and the market at the organizational level and its role is to

formulate and implement marketing programmes. Subhash C. Jain (2000)

2.0 MARKETING PLAN

Taking a look at the current position of Research in Motion, they are a worldleader in the telecommunications industry worldwide. According to the annualreport of their year ended February 2010, it says and I quote Research InMotion Limited (RIM) (Nasdaq: RIMM; TSX: RIM), a world leader in the mobilecommunications market, today reported results for the three months and fiscalyear ended February 27, 2010 (all figures in U.S. dollars and U.S. GAAP). AnnualReport (2010)

From the annual report, certain highlights were stated to show the achievementsof the organization and they were summarized thus;

Annual Highlights:

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Revenue grew 35% over the prior fiscal year to $15 billion BlackBerry subscriber account base grew 65% over the prior fiscal year to over41 million, with a record 4.9 million net new subscriber accounts added in Q4 BlackBerry smart phone shipments grew more than 40% over the prior fiscal

year to 37 million BlackBerry was the number one selling smart phone brand in the United Statesat the end of calendar 2009 GAAP earnings per share grew 30% over the prior fiscal year to $4.31 per sharediluted

From this information, RIM has been able to achieve a good standing in theindustry. This has been achieved through intense research and developmentwhich is has been going on constantly for about twenty years and after Appleushered in a new age of technological product, RIM focused on a differentsegment of the market and created a version of Apples I-phone which was formusic and entertainment and replaced that with a product for people who

needed to be in touch with information at all times through e-mail, textmessaging and chat services. Heather Green (2004)

Having made a remarkable mark in hardware and software sales and distributingits products through national carriers all over the world, I want to proffer a morecustomer oriented approach to the sales and marketing strategy of RIM.

Giving the position of a leader in the telecommunications industry at themoment, other organizations will also be aiming to develop products which willcompete with the RIM devices and capitalizing on the perception of theorganization by the customers who are currently enjoying the blackberryexperience will be a good way to grow and retain revenue for RIM.

RIM already has offices in Canada, North America and Asia(http://www.rim.com/company/). I want to propose that they set up a sale andafter sales service centre in Nigeria where their products which include software,hand held devices (the blackberry smart phone) will be sold and also after salesservices will be rendered to the customers.

3.0 OBJECTIVES

This sale and after sales service centre should in turn achieve the following

objectives and target:

1) Increase device revenues by 10%

2) Increase service revenues by 0.001%

3) Drive software platform sales to SMEs to achieve a 15% of the market

share

4) Reach its sales target in 12 months

Device sales should hit a target of 2.5 million units at the sales and service

centre and a further 2.5 million by distribution through the nations mobilenetwork carrier.

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4.0 SWOT ANALYSIS

Referring to the SWOT Analysis for RIM which is adapted from Datamonitor which

is a leading business information company specializing in industry analysis. This

market plan is founded on the basis of taking advantage of the organizationsweaknesses and converting them into strengths.

One of the weaknesses is the issue of supply of RIM products to the end user. At

the moment this is being dealt with by RIM in the form of alliances with the

mobile telecommunication carries of different countries all over the world. They

are currently using the platforms of existing mobile telecommunication networks

as a distribution channel for their product especially the blackberry smart phone

and in all and are distributing through 475 carriers worldwide. RIM Press release

(1999)

Another weakness which is being momentarily converted to strength is thereliance of RIM on a small customer base. In their annual report for the year

ended February 2010, the blackberry subscriber account base grew 65% over

the prior fiscal year to over 41 million, with a record 4.9 million net new

subscriber accounts added in Q4

This figure shows that already there is a move in this direction and a very high

potential for growth and this reinforces the viability of this market plan in

reaching out some more to the end users of the products and having a more

customer oriented approach. As mentioned earlier, the cornerstone of marketing

is the ability to develop a long term relationship with the customers. ChristianGronroos (1989)

5.0 MARKETING STRATEGY

This market strategy overall is consistent with the general outlook of RIM as an

organization and will most importantly allow RIM to increase their market share

and revenue. According to Michael Porters generic strategies, the overall outlook

of this marketing strategy would be the Differentiation strategy Philip Kotler

(2000), refer to figure 3 in the appendices. This is because the Nigerian market is

highly driven by perception and the best approach is to go in and create an

impression in the market.

Nigeria is the most populous country in Africa with a population of about 150

million people and it has a very rich and diverse cultural background and it is

also one of the commercial nerve centres in West Africa and Africa. Indexmundi

(2010). The following figures presented below are the statistics of the population

distribution of Nigeria at a glance and the essence of presenting these figures is

to establish the potential of the market in terms of customers.

Age Distribution:

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0-14 years: 41.5% (male 31,624,050/female 30,242,637)

15-64 years: 55.5% (male 42,240,641/female 40,566,672)

65 years and over: 3.1% (male 2,211,840/female 2,343,250)

Urbanization:

Urban population: 48% of total population (2008)

rate of urbanization: 3.8% annual rate of change

Literacy:

Definition: age 15 and over can read and write

total population: 68%

male: 75.7%

female: 60.6%

Looking at the age distribution of the country, 55% of the population which

comes to about 83 million people fall within the range of customers that can be

targeted by RIM. They are the class of people who tend to be more drawn

towards technological advances and products.

Again 86% of the people that fall within this age bracket can be found in the

urban centres. Cities like Lagos, Abuja and Port Harcourt where a considerably

high amount of business activities are carried out will be the areas where these

sales outlets will be located.

It is important to also mention that 68% of the population are literate andtherefore they can indeed make use of the offering and the products of RIM. The

figures showing the subscriber data base in figure 5 shows a very large portion of

the market is still left untapped and this potential market is going to be RIMs

target market.

The Nigerian market can be segmented demographically and psycho graphically

using factors such as age, income, occupation and education. Psycho graphically,

we would be looking at social class and lifestyle. The demographic segmentation

of the market has been delved into above and some of the factors quite overlap

with the psycho graphic factors when it comes to the Nigerian population.

1) Social class: This can be further broken down into the working class,

image in society, peer group and a generally they way one is seen in the

society. Nigerians are a people that hold perception in high regard and the

way a person presents him or herself says a lot about them. They always

want to be seen as trendy and up to date which will attract them to RIMs

offering.

2) Lifestyle: Also they are seen to flashy people and always want to have the

best of things. This can be seen in the society as high valued products

such as cars have a very good market base. Lagos is the fifth most

expensive city in the world and Port Harcourt is also one of the most

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expensive cities in Africa and this goes a long way to show that the

population can afford the products.

Figure 5 in the appendices shows the telecommunications market at a glance

and from the data we can infer that there is still around 40% of the market thatfalls within the market segmentation which is still untapped. This figure goes on

to show that the objectives set by this marketing strategy are achievable.

The telecommunications industry in Nigeria has seen tremendous growth in the

past 15 years. According to the chief executive officer of the Nigerian

communications commission in 2005 Engr Ernest C A Ndukwe, he said The

Board of the Commission from inception worked assiduously to build the

regulatory structures required for enhanced private sector participation. The

result of this has brought about a massive growth in the subscriber base of

mobile communication users and internet users too.

Ansoff Matrix has been said to be one of the concepts that can be used to

analyse and compare the market against an organizations offering Malcolm H.B.

McDonald (1992). Referring to figure 4 in the appendices, the position of RIM in

expanding into Nigeria would be a mix of market penetration and market

development. Currently RIM is does not have any alliance with any of the mobile

telecommunication companies in the country.

In a telephone interview conducted with an old colleague, he mentioned that

currently the blackberry handheld devices are purchased from the open market

and sold as a bundled product by adding one of their stand alone products to it.

Figure 5 show that there is healthy competition between the mobile network

operators and forming an alliance with them will give them an alternative

distribution network and they will share the mobile operators customers too.

6.0 MARKETING MIX

Product will be introduced to the market as they are. Blackberry handheld

devices, software platforms for office networks and applications that are relevant

to the market will also be sold as part of the offering. These products will behighly competitive in the market as there are barely any real threats from other

competitors.

Promotion will be carried out in the way of adverts, bills boards and ads on cabs

and high rise buildings in the business districts of the cities where most of the

working class people and businesses can be found.

Also, there will be advertisements in college campuses to draw the attention of

students and the school society towards the offering.

To create a niche position, there will be no affiliations to raves and entertainment

programmes rather there will be affiliations to educative programmes such as

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seminars and educative competitions. This will portray an image of seriousness

and responsibility with an outlook of adding value to peoples lives.

Pricing will be set in relation to global prices and the prices that are obtainable

for various products all over the world will be offered. This will make the offeringto be seen as standardized and the image that RIM has on the global scale will

be maintained in the new market.

Although various payment plans such as pay monthly plans should be introduced

to target customers who might not be able to come out of the pocket for a one

off purchase of a product. This can also be a good selling point for office

application and soft wares.

The convenience of payment plan will be a strong point that will create very

good competitive advantage for the organization.

Place as mentioned earlier will be locations in the business districts of big citieswhere a high percentage of the target market can be found. Another

consideration will be forming an alliance with existing mobile network operators

who will officially distribute the hand held devices and sell as a branded product

along with their network products and services.

This marketing mix is aimed at creating brand equity which intensifies and

strengthens the presence of the brand in the market. Boonghee Yoo et al (2000).

The image created by this mix will also differentiate RIM and put it in a class by

itself in the market. This will ensure that the marketing strategy is followed and

also ensure a constantly growing market share because perception goes a long

way in the minds of the customers in the Nigerian market.

7.0 COST OF INVESTMENT AND ROI

The cost of investment is estimated below:

Office space: N10, 000,000.00 per month for 12 months in two locations

Personnel : N120, 000,000.00 per annum

Cost of operations: N240, 000,000.00 per annum

Cost of marketing and advertising: N250, 000,000.00 per annum

Contingency fund/ Miscellaneous: N 100, 000,000.00

Total sum of Initial Investment: N1, 430, 000,000.00

Approximately : N1, 405, 000,000.00

The value in US$ @ $1 N150.00: $9, 700, 000.00

Considering unforeseen circumstances and expenditure and to be in a position

as comfortable as possible, we can safely assume the investment to be at $10,

000,000.00

From the set targets and objectives, the expected income from the investment

should be as follows:

Revenue from services: 0.001% of annual revenue of$14.95 billion = $2.3

Million

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Revenue from sales: with 2.5 Million units target selling at an average of$250

each =

$625,000,000.00

Total revenue: $627,300,000.00

@ 50% TARGET YEAR 1 YEAR 2EXPENDITURE ($) 10,000,000.00 10,000,000.00INCOME ($) 313,650,000.00 313,650,000.00VARIANCE ($) 312,650,000.00 312,650,000.00ROI (%) 31 31

FIGURE 7: BUDGET FLEXING FOR EXPECTED INCOME IN THE FIRST TWO YEARS

From the figures shown above even if the market plan were to be bringing in half

of the expected returns, although speculative it is certain that RIM as an

organization can thrive excellently in the Nigerian market and they can

significantly increase their global market share, generate a high revenue and be

very competitive.

REFERENCES

Christian Gronroos (1989) Defining Marketing: A Market-Oriented Approach

European Journal of Marketing Volume: 23 Issue: 1 Page: 52 60

Subhash C. Jain (2000) Marketing planning and strategy. [Online] Available at

http://faculty.fuqua.duke.edu/~moorman/GeneralMills/Section2/Section2Docume

nts/MarketingPlanningAndStrategy-p23-27.pdfaccessed on 24th March, 2010

Annual report 2010 research in motion [Online] Available at

http://www.rim.com/investors/documents/pdf/pressrelease/2010/Q4_press_releas

e.pdfaccessed on 24th March, 2010

Heather Green, Cliff Edwards and Roger O. Crockett [Online] Available at

http://www.businessweek.com/magazine/content/04_49/b3911084_mz063.htm

accessed on 24th March, 2010

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http://faculty.fuqua.duke.edu/~moorman/GeneralMills/Section2/Section2Documents/MarketingPlanningAndStrategy-p23-27.pdfhttp://faculty.fuqua.duke.edu/~moorman/GeneralMills/Section2/Section2Documents/MarketingPlanningAndStrategy-p23-27.pdfhttp://www.rim.com/investors/documents/pdf/pressrelease/2010/Q4_press_release.pdfhttp://www.rim.com/investors/documents/pdf/pressrelease/2010/Q4_press_release.pdfhttp://www.businessweek.com/magazine/content/04_49/b3911084_mz063.htmhttp://faculty.fuqua.duke.edu/~moorman/GeneralMills/Section2/Section2Documents/MarketingPlanningAndStrategy-p23-27.pdfhttp://faculty.fuqua.duke.edu/~moorman/GeneralMills/Section2/Section2Documents/MarketingPlanningAndStrategy-p23-27.pdfhttp://www.rim.com/investors/documents/pdf/pressrelease/2010/Q4_press_release.pdfhttp://www.rim.com/investors/documents/pdf/pressrelease/2010/Q4_press_release.pdfhttp://www.businessweek.com/magazine/content/04_49/b3911084_mz063.htm


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Indexmundi (2010) [Online] Available at

http://www.indexmundi.com/nigeria/demographics_profile.html source CIA World

fact book accessed on 24th March, 2010

National communications commission Nigeria [Online] Available at

http://www.ncc.gov.ng/subscriberdata.htmaccessed on 24th March, 2010

ENGR ERNEST C A NDUKWE (2005) TELECOMMUNICATIONS IN NIGERIA: THENEXT FRONTIER [Online] Available athttp://www.ncc.gov.ng/speeches_presentations/EVC%27s

%20Presentation/Telecommunications%20in%20Nigeria.pdfaccessed on 24th

March, 2010

Malcolm H.B. McDonald (1992) Strategic Marketing Planning: A State-of-the-artReview Marketing Intelligence & Planning Volume: 10 Issue: 4 Page: 4 22 ISSN:0263-4503 DOI: 10.1108/02634509210016632 [Online] Available athttp://www.emeraldinsight.com/10.1108/02634509210016632 accessed on 24thMarch, 2010

[Online] Available at http://www.jidaw.com/telecomproviders.html accessed on

24th March, 2010

Boonghee Yoo, Naveen Donthu, and Sungho Lee (2000) an examination

of selected marketing mix elements and brand equity. Journal of

marketing science Volume 28, number 2 March 2000

10.1177/0092070300282002

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http://www.indexmundi.com/nigeria/demographics_profile.htmlhttp://www.ncc.gov.ng/subscriberdata.htmhttp://www.ncc.gov.ng/speeches_presentations/EVC's%20Presentation/Telecommunications%20in%20Nigeria.pdfhttp://www.ncc.gov.ng/speeches_presentations/EVC's%20Presentation/Telecommunications%20in%20Nigeria.pdfhttp://www.emeraldinsight.com/10.1108/02634509210016632http://www.jidaw.com/telecomproviders.htmlhttp://www.indexmundi.com/nigeria/demographics_profile.htmlhttp://www.ncc.gov.ng/subscriberdata.htmhttp://www.ncc.gov.ng/speeches_presentations/EVC's%20Presentation/Telecommunications%20in%20Nigeria.pdfhttp://www.ncc.gov.ng/speeches_presentations/EVC's%20Presentation/Telecommunications%20in%20Nigeria.pdfhttp://www.emeraldinsight.com/10.1108/02634509210016632http://www.jidaw.com/telecomproviders.html


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12 Manage.com [Online] Available at http://www.12manage.com/methods_3C

%27s.html accessed on 24th March, 2010

APPENDICES

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FIGURE 1: ROLE OF MARKETING IN AN ORGANIZATION (adapted from journal of

marketing 1989)

Strengths Weaknesses

Growing brand image

Comprehensive offerings

Robust financials

Dependence on few customers

Issues with product supply

Opportunities Threats

Positive outlook for smart phones

Expanding portfolio of offerings

Increasing competition

Involvement in legal issues

FIGURE 2: SWOT Analysis for RIM adapted from Data Monitor

Publication July 2009

FIGURE 3: Michael Porters generic strategies

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FIGURE 4: Ansoff Matrix adapted from Wikipedia

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FIGURE 5: SURVEY OF MOBILE NETWORK USERS IN NIGERIA (adapted from

jidaw.com 2009)

Subscriber Data

Subscriber Data At A Glance(September 2009 - February 2010)

Sep '09 Oct '09 Nov '09 Dec '09 Jan '10 Feb '10

MobileGSM

61,998,716.00

63,250,377.00

63,391,945.00

65,533,875.00

66,738,944.00

67,851,706.00

Activelines

Mobilecdma

6,994,329.00

7,291,714.00

7,448,156.00

7,565,435.00

7,772,670.00

7,795,564.00

Fixedwireless

1,344,612.00

1,366,269.00

1,410,130.00

1,481,954.00

1,422,593.00

1,433,736.00

Total70,337,657.00

71,908,360.00

72,250,231.00

74,518,264.00

75,934,207.00

75,934,207.00

Mobile 121,785 121,785 121,785 121,785 126,785 124,125

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GSM ,526.00 ,526.00 ,526.00 ,526.00 ,526.00 ,308.00

Installedcapacity

Mobilecdma

14,602,284.00

14,723,269.00

14,724,987.00

14,829,931.00

15,253,699.00

15,272,405.00

Fixed

wireless

9,360,0

99.00

9,362,4

16.00

9,373,9

47.00

9,388,1

45.00

9,408,8

38.00

9,437,7

57.00Total

145,747,909.00

145,871,211.00

145,924,460.00

146,003,602.00

151,448,063.00

148,835,470.00

Teledensity (%)

50.24 51.36 51.61 53.23 54.24 55.06

Teledensity was based on a populationestimate of 140 million.

Teledensity is based onactive subscribers.

Summary Of Telephone Subscribers In Nigeria (Sept. 2009 Feb. 2010)

FIGURE 6: SUBCRIBER DATABASE FOR NIGERIA AT A GLANCE adapted from NCC

(Nigerian Communications Commission) 2010

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