Research project for MBA Marketing Analytics course.

1. Reclaiming the Smart
Phone Market
M. Brent Eason
Ben Furr
Carrie Martinelli
Adam Scott

3. BUSINESS INFORMATION
▪ Founded in 1984
▪ First BlackBerry launched in 1999
▪ 2009 Revenue: $11.1 billion
▪ 2009 Net Income: $1.89 billion
▪ Employees: 12,000
RIM Confidential

4. 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

5. KEY COMPETITORS
▪ Strong competitor in the prosumer ▪ Low cost OS with open development
customer segment – 15% of current
▪ Advantages: Scalable and flexible –
smartphone market share
functions on a variety of smartphones
▪ Advantages: Brand awareness
▪ Disadvantages: Low adoption and low
and variety of application downloads
number of available apps (both are
▪ Disadvantages: Price point and rapidly increasing)
limited to AT&T GSM network
▪ Overall, serious threat to both the
iPhone and BlackBerry in the next
12-16 Months
RIM Confidential

7. 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

8. RESEARCH STRATEGY
OBJECTIVE
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.
PRIMARY DATA
▪ Exploratory Survey: “How Smart is Your Phone?”
▪ Follow-up Survey
RIM Confidential

9. RESEARCH STRATEGY
ADVERTISE!
RIM Confidential

11. 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

12. DATA COLLECTED
SURVEY STRUCTURE
Eligibility Check General Phone Preferences
Information About Existing Phone Demographic Information
DEPENDENT VARIABLE
▪ How likely are you to make your next phone a BlackBerry?
INDEPENDENT VARIABLES
▪ Usage Information ▪ Demographics
▪ Feature Preferences ▪ Psychographics
RIM Confidential

13. SAMPLE DEMOGRAPHIC PROFILE
GENDER CHILDREN EDUCATION OCCUPATION
Female 46.2% 160 Yes 48.6% 168 Did not graduate high school 0.0% 0 Full-time student 3.2% 11
Male 53.8% 186 No 51.4% 178 High School Diploma 0.3% 1 Engineering 6.9% 24
Technical school or some college 2.9% 10 Construction/Physical labor 1.4% 5
AGE # HH MEMBERS 2-year college degree 2.6% 9 Information Technology 16.2% 56
18-24 3.2% 11 1 15.0% 52 4-year college degree 47.1% 163 Medical/Health Services 4.3% 15
25-29 23.1% 80 2 43.1% 149 Masters 42.5% 147 Sales/Marketing 12.1% 42
30-34 27.5% 95 3 18.8% 65 PhD 4.6% 16 Financial Services 11.8% 41
35-39 14.2% 49 4 19.7% 68 Education 6.6% 23
40-44 10.1% 35 5 2.9% 10 HH INCOME Retail/Hospitality 2.0% 7
45-49 3.8% 13 More than 5 0.6% 2 less than $50,000 10.1% 35 Public/Emergency Services 0.0% 0
50-54 8.1% 28 $50,000 - <$75,000 16.5% 57 Artist/Musician/Designer 0.6% 2
55+ 10.1% 35 RESIDENTIAL TYPE $75,000 - <$100,000 15.9% 55 Science/Biotechnology 7.5% 26
Urban 25.1% 87 $100,000 - <$125,000 14.7% 51 Government/Legal 5.8% 20
MARITAL STATUS Suburban 64.7% 224 $125,000 - <$150,000 9.8% 34 Self-Employed/Consultant 4.3% 15
Yes 70.2% 243 Rural 10.1% 35 $150,000 - $200,000 13.9% 48 Media/Journalism 0.3% 1
No 29.8% 103 More than $200,000 6.4% 22 Non-Profit/Social Services 2.0% 7
Prefer not to say 12.7% 44 Homemaker 2.6% 9
Retired 0.9% 3
Unemployed 1.4% 5
▪ All 346 Respondents Other 9.8% 34
▪ Satisfactory Spread, Very close to Prosumer profile
RIM Confidential

15. 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

16. STEPWISE REGRESSION
Q3 -
Q#3 Please rate the order of
Q8
Q#8 - On a scale of 1-7, please indicate how
importance of the following in your Parameter frequently you intend to use the following
P-Value Tolerance Parameter
choice of WIRELESS CARRIER, Estimate features on your NEXT CELL PHONE. These P-Value Tolerance
Estimate
on a scale of 1-7: features may or may not be available on your
current phone.
Brand Availabilty -0.14299 0.0003 0.76136
Frequency of use of Calendar/Reminders 0.109 0.0041 0.60378
Data Availabillity 0.20886 <.0001 0.76505
Frequency of use of Purchased ($$) Add-on
-0.1323 0.0024 0.6863
Phone Pricing 0.07273 0.0849 0.99019 Games or Apps
Frequency of use of Music Playback -0.1534 <.0001 0.66558
Q5 -
Q#5 Please rate the order of Q10
importance of the following in your Parameter Q#10 Generally, where do you look for
P-Value Tolerance information when purchasing technology
initial choice of PERSONAL CELL Estimate Parameter
products? (You may choose more than one P-Value Tolerance
PHONE, on a scale of 1-7 Estimate
answer but must choose at least one.)
Price/Promotional discount 0.09651 0.0185 0.91478
Internet – Retailer website (Binary Variable ) 0.24198 0.0838 0.98292
Ability to Play Music -0.11165 0.0052 0.67424
Magazines – Hi-Tech (Binary Variable) -0.65675 0.0116 0.98897
Importance of Touch Screen -0.22011 <.0001 0.60131
Q19 Parameter
Q#19 How would you best characterize the
Q7 -
Q#7 Please choose how often area in which you live? Estimate
P-Value Tolerance
you currently use the following Parameter
P-Value Tolerance
features of your CURRENT CELL Estimate Suburban Area ( Binary Dummy Variable ) -0.2624 0.0851 0.99849
PHONE on a scale of 1-7:
Frequency of use of
Calendar/Reminders
0.10564 0.0032 0.60985 Q20
Q#20 Which kind of computer do you use Parameter
P-Value Tolerance
Frequency of use of Free Add-on most frequently? Estimate
-0.09581 0.02 0.53927
Games or Apps
Other PC - Windows or Linux (Binary Dummy
Frequency of use of Music 0.58534 0.0039 0.99849
-0.21721 <.0001 0.6389 Variable)
Playback
RIM Confidential

17. CLUSTER ANALYSIS
Cluster Sum m ary
Standard Deviation Maxim um Distance
(How close people are Distance from Nearest Betw een
Cluster Frequency
related to each other Seed to Cluster Cluster
inside cluster) Observation 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
RIM Confidential

18. CLUSTER ANALYSIS: NARROWING FOCUS
CLUSTER MEAN #Q11. How likely are you to choose a "smart"
1 4.84
4 4.89
phone the next time you buy a personal cell
5 4.03 phone? (Continuous Scale 1-5)
Average of the
3.72
Others
CLUSTER MEAN #Q12. How likely are you to make your
1 2.84
4 3.18
next phone a BlackBerry, specifically?
5 2.49 (Continuous Scale 1-5)
Average of the
1.79
Others
RIM Confidential

19. CLUSTER MEANS: PREFERENCES
Please rate the order of importance of the following in your choice of WIRELESS
#Q3. CARRIER? (Continuous Scale 1-7)
Cluster
Preference
1 4 5
Brand Availability* H M M
Voice Quality H H H
Voice Availability H H H
Data Speed H H M
Data Availability* H H M
Service Plan Price H H H
Phone Price* H M H
(1-3=Low, 3-5=Mod, 5-7=High, * Correlation w/ Linear Regression)
RIM Confidential

20. CLUSTER MEANS: PREFERENCES
Please rate the order of importance
#Q5. of the following in your initial choice
Preference
1
Cluster
4 5
Brand Reputation H M M
of PERSONAL CELL PHONE?
Voice Clarity H H H
(Continuous Scale 1-7)
Email* H H M
Style/attractiveness H M M
Price/Promotion* H M H
Tech. Integration H M M
Ease of use H H H
Phone Size H M H
Battery Life H M H
Internet H H M
Music* M L L
Video M L L
Pictures H M M
GPS M M M
1-3=Low, 3-5=Mod, 5-7=High QWERTY keyboard H H M
* Correlation w/ Linear Regression Touch Screen* M M M
RIM Confidential

21. CLUSTER MEANS: PREFERENCES
Please choose how often you currently use the following features of your CURRENT
#Q7. CELL PHONE? (Continuous Scale 1-7)
Cluster
Preference
1 4 5
Call M H H
Text H H H
Email* H H L
Calendar* H M L
Web Brow sing H H L
Social Netw orking M M L
Purchased Apps L L L
Free Apps* M L L
Camera H M M
Video L L L
Music* L L L
(1-3=Low, 3-5=Mod, 5-7=High * Correlation w/ Linear Regression)
RIM Confidential

22. CLUSTER MEANS: PREFERENCES
How frequently you intend to use the following features on your NEXT CELL
#Q8. PHONE? (Continuous Scale 1-7)
Cluster
Preference
1 4 5
Call H H H
Text H H H
Email* H H H
Calendar* H H M
Web Brow sing H H M
Social Netw orking H M M
Purchased Apps* L L L
Free Apps H L M
Camera H M M
Video M L L
Music* M L L
(1-3=Low, 3-5=Mod, 5-7=High * Correlation w/ Linear Regression)
RIM Confidential

23. CLUSTER MEANS: PREFERENCES
Generally, where do you look for information when purchasing technology
#Q10. products? (Binary Variable)
Cluster
Preference
1 4 5
In-Store Promo Displays M L M
In-Store Sales Rep M M M
Internet-manufacturer's w ebsite M M M
Internet-retailer's w ebsite* M M M
Internet-review w ebsites* H H H
Internet-social m edia w ebsites L L L
Internet-technology w ebsites M M M
Magazines-High Tech* L L L
Magazines-Lifestyle L L L
New spapers L L L
Television L L L
Word of Mouth H H H
(1-3=Low, 3-5=Mod, 5-7=High * Correlation w/ Linear Regression)
RIM Confidential

24. DISCRIMINANT ANALYSIS
CLUSTER #1 Demo/Psychographics
Cluster
1 4 5
▪ More likely younger
Male? 0.45 0.67 0.45
▪ Less likely married, children,
Age: 1(18) - 8(55+) 3.2 4.2 3.9
suburban
Education: 1(HS) - 6(PhD) 4.4 4.4 4.4
▪ More likely a PC owner Married? 0.55 0.75 0.78
Children? 0.25 0.51 0.55
CLUSTER #4 # HH Members 2 3 3
▪ More likely male Surburban? 0.57 0.67 0.69
▪ Higher income Urban? 0.27 0.24 0.22
Mac? 0.05 0.07 0.05
CLUSTER #5 PC? 0.93 0.84 0.84
Emotional Spender? (1-7) 4.0 3.6 3.8
▪ Very similar to Cluster #4
HH Income: 1(<$50K) - 7(>$200K) 3.1 4.5 3.5
except balanced sex and lower
Mostly Spend? (0-7) 3.8 3.8 4.0
income level
RIM Confidential

25. DISCRIMINANT ANALYSIS
Occupation: 0(N) - 1(Y)
Cluster CLUSTER #1
1 4 5
▪ Mostly IT Professionals
Artist/Musician/Designer 0.02 0.00 0.02
Science/Biotechnology 0.07 0.04 0.13
▪ Somewhat Financial and Education
Government/Legal 0.09 0.05 0.04
Self-Employed/Consultant 0.00 0.05 0.02 CLUSTER #4
Media/Journalism 0.02 0.00 0.00
▪ Mostly Sales/Marketing and
Non-Profit/Social Services 0.00 0.00 0.07
Homemaker 0.00 0.00 0.05
Financial Professionals
Retired 0.00 0.00 0.02 ▪ Somewhat IT
Unemployed 0.00 0.00 0.04
Full-time student? 0.07 0.02 0.02
CLUSTER #5
Engineering 0.05 0.07 0.05
Construction/Physical labor 0.00 0.04 0.00
▪ Most Diverse
Information Technology 0.23 0.15 0.09 ▪ Somewhat Science/Biotech and
Medical/Health Services 0.07 0.04 0.05 Sales/Marketing
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
RIM Confidential

27. 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

28. TARGET MARKET SELECTION
KEY DEMOGRAPHICS
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
RIM Confidential

29. TARGET MARKET SELECTION
KEY PREFERENCES KEY PREFERENCES
IMPORTANCE or IMPORTANCE or
PREFERENCE or USAGE PREFERENCE or USAGE
INTENTION INTENTION
Wireless Carrier - Voice Quality HIGH Current Cell Phone Use - Purchased Apps LOW
Wireless Carrier - Voice Availability HIGH Current Cell Phone Use - Video Playback LOW
Wireless Carrier - Service Plan Price HIGH Current Cell Phone Use - Music Playback LOW
Personal Cell Phone Preferences - Voice Clarity HIGH Intend to Use - Purchased Apps LOW
Personal Cell Phone Preferences - Ease of Use HIGH Marketing Channel - Social Media Sites LOW
Intend to Use - Voice Calling HIGH Marketing Channel - High-Tech Magazines LOW
Intend to Use - Text Messaging HIGH Marketing Channel - Lifestyle Magazines LOW
Intend to Use - Email HIGH Marketing Channel - Newspapers LOW
Marketing Channel - Web Review Sites HIGH Marketing Channel - Television LOW
Marketing Channel - Word of Mouth HIGH
OTHER FINDINGS
Somewhat Important: In-Store Sales Rep, Manufacturer's website, Retailer's website, IT websites
RIM Confidential

30. 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

31. 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
RIM Confidential