Reclaiming the Smart Phone Market

M. Brent Eason Ben Furr Carrie Martinelli Adam Scott

 ROUND 1 BACKGROUND INFORMATION

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ORGANIZATION OVERVIEWS

Founded 1984 2009 Revenue: $11.1 billion 2009 Net Income: $1.89 billion Employees: 12,000

Founded 1976 as Apple Computer 2009 Revenue: $42.91 billion 2009 Net Income: $8.24 billion Employees: 34,300

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PRODUCTS

BlackBerry product first launched in 1999 Wide range of Wireless Service Providers (AT&T, Verizon, Sprint and 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

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CUSTOMER PROFILES
Data From CrunchGear.com July 13, 2008

iPhone Customers

72% Male Average Age 31 31% 15-24 32% 25-34 31% 35-49 6% 50+ 58% College Education (43% Natl Avg) 43% Reside in NY or CA (Twice the Natl Avg) Average HHI $75,600 (26% over Natl Avg)

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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 business tool and a non-business (prosumer) device Allows IT professionals the ability to deploy and maintain end users efficiently with the BB Enterprise Server

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EXTERNAL ANALYSIS

KEY INSIGHTS
Competition from iPhone has forced BlackBerry devices to support more features LBS, downloadable applications, higher resolution cameras and touchscreen technology. BlackBerry sales for business use are increasing, however, prosumer sales are not having the same success. Enterprise (Business) activations increased 14% in 2009 Prosumer activations increased 12% in 2009

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INTERNAL ANALYSIS

KEY INSIGHTS
The cost of new feature implementation has increased over 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

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 ROUND 2 THE RESEARCH PROBLEM

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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 offerings and speed to market

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OUR RESPONSE

Carefully 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.

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BUSINESS IMPLICATIONS

TARGETING & POSITIONING

PRODUCT DEVELOPMENT

PRICING & PROMOTION

BOTTOM LINE: Sales, Profit, and Market Share

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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

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 ROUND 3 DATA DESCRIPTION

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DATA SOURCES

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)

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HOW SMART IS YOUR PHONE?

SURVEY STRUCTURE
Eligibility Check Information About Existing Phone General Phone Preferences Demographic Information

DEPENDENT VARIABLE
How likely are you to make your next phone a BlackBerry?
Not at all likely Somewhat Unlikely Undecided Somewhat Likely Very Likely

This structure creates bias with the wording. A numerical scale from 1-5 or 1-7 would be ideal.

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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?

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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?

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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.
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QUESTION BREAKDOWN

PHONE/TECHNOLOGY PREFERENCES CONT.

#9: If you do not currently use a Smartphone, what one thing would most 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 Style/Color Features/Applications/Games Highly Most

#14: Do you prefer a physical keyboard or a touch screen?

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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 A Educational Level Marital Status Children

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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?

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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 comparative qualities

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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

SECONDARY DATA

MINTEL REPORTS
Based on Primary and Secondary Data Customer Base Information Preference Studies Market Forecasts Customer Segmentation

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SECONDARY DATA

HOW WILL WE USE IT?

To improve original survey Validate results from primary data

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 ROUND 4 ANALYSIS PLANS

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ANALYSIS PLANS

CLUSTER ANALYSIS
Identify meaningful customer segments

DISCRIMINANT ANALYSIS
Profile each segment demographically

REGRESSION ANALYSIS
Identify significant factors affecting smart phone choice

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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.

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REGRESSION ANALYSIS

DEPENDENT VARIABLE
Likelihood of choosing BlackBerry

INDEPENDENT VARIABLES
Phone Features / Service Ratings Demographics Price/Promotion Response Lifestyle Characteristics

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REGRESSION ANALYSIS

Run Stepwise Regression to eliminate insignificant variables

Check for Multicollinearity with a Tolerance Value of .10

Investigate Curvilinear Effects and Interaction Effects

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FEEDBACK

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