Nothing smart about RIM’s aimless strategy

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What segment are you targeting? Yes, I know I keep banging on about it but it’s a question that only a decent marketer can answer.

Never mind the number of Facebook likes or the size of the ad budget, the targeting question is the one that really separates well-run brands from the rest.

The Americans have a great word for it. They call it being ’choiceful’. Yes I know it’s a bit cheesy but I firmly believe all good marketers are inherently choiceful in their approach to the brands that they manage. Choiceful in the research methods they use and do not use.

Choiceful in the communications options they invest in. And choiceful in the segments they do and do not target.

Look at the troubles now besieging Canadian tech firm Research In Motion (RIM) – the once powerful manufacturer of the BlackBerry – as evidence. In September the company’s share price dropped in value by a third. As RIM’s troubles intensify in the months to come you can expect a wealth of opinions on where the company went wrong. But let’s see for ourselves the real cause of the company’s imminent collapse.

The reason for the continued drop in RIM’s share price can be explained by growing doubts from investors about the company’s long-term profitability. Most notably, the stock market has become concerned at the performance of the company’s new tablet device, the Playbook, which was launched barely six months ago in the US and in June in the UK.

RIM’s Playbook failed because it was aimed at everyone and, as a result, became one that appealed to no one

The reason for these profitability worries can be attributed largely to Playbook’s major distributors, who are rapidly losing faith with it. American retailers like Best Buy have slashed prices in recent days from the original RRP of $499 to $299. Meanwhile in the UK,

Carphone Warehouse is giving the tablet away free to customers who sign up for a new BlackBerry phone contract. Rumours are rife that these discounts are the actions of retailers who simply cannot shift their Playbook stock. Some analysts estimate that up to half a million of the original production run of 700,000 Playbooks have yet to be sold.

The reason for slow sales and the increasingly desperate promotional activity on the Playbook can be explained by the tablet’s remarkably poor reception from critics and customers alike. Launched with only a fraction of the iPad’s apps and a significantly smaller screen, the Playbook not only lacked entertainment credentials, it was also launched without RIM’s popular native software for checking email – meaning that unless it was tethered to a BlackBerry you could not access your inbox on the device. As the New York Times put it on launch day back in April: “RIM has just shipped a BlackBerry product that cannot do email. It must be skating season in hell.”

The reason RIM launched such a muddled product with neither the business functionality usually associated with BlackBerry or the entertainment options expected by more casual users can be explained by a lack of decisiveness at the very top of the company. Despite originally dominating the business user segment of the market, 70% of RIM’s current subscribers are now non-business users.

The launch of the Playbook, therefore, presented RIM with something of a dilemma. Should it be designed with its traditional business user in mind or be aimed at the bigger consumer segment instead? It was a question that RIM had to answer in order to position, design and then successfully launch its tablet. And yet it was a question the company singularly failed to address.

In the initial design stages, RIM’s CEO described the Playbook as a “professional tablet” built around the requirements of corporate chief technology officers. According to a recent article in the Wall Street Journal, however, a separate executive faction lobbied for a tablet that was designed around the gaming and entertainment needs of non-business users. Patrick Spence, RIM’s head of global sales and regional marketing, hardly helped matters when he recently announced that the “real target – and we could’ve had more clarity around that – was the 70 million existing BlackBerry subscribers out there”.

Basically, take your pick. Depending on which RIM executive you listened to, the Playbook was either targeted at business users, regular consumers or both. And in the ultra-competitive world of tablet sales, this lack of clarity and decisiveness is proving hugely damaging.

By failing to address the issue of who RIM is going after, and by definition who it is not, the Playbook has fallen between two very large stools. In a classic marketing muddle, the Playbook failed because it was a device that was aimed squarely at everyone and, as a result, became one that appealed to no one.

Others will soon ascribe RIM’s decline to bad products, lowered profitability or disappointing sales figures. But the real story is simpler and more fundamental than that. The reason RIM failed is that it never managed to answer the one question that all marketers have to be able to answer: who exactly are you targeting?

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