Chapter 14 - Marketing Channels and Retailing

  When I was first confronted with this assignment, I was keen to find a Motorola retail store in New York, Later on, I found out that they haven't got any brick and mortar stores in the U.S. This gave me an opportunity to look in to other companies that excels in retailing. I finally picked Best Buy since I consider it as my second favorite place to buy electronic equipment after Amazon. I went in to their 86th Street store, arguably one of the busiest stores in Manhattan.

        

            As soon as I stepped in I recalled something that Professor Evans mentioned in the class. It was the smell of the store, the sense that matters most to a marketer. They certainly capitalized on that, since it had a pleasant smell for a busy store in the rush hour. I went in with the intention of inspecting the procedures in mobile department, and I was surprised by the crowd that was gathered in the mobile section. It had every latest gadget in the market today, and it was apparent that they lure customers from the hands on experience provided in their showrooms.

 From my short visit, I learned about their new price match service which allows the customers to match the prices of an item with other retailers, and purchase it for the bargain price. It demonstrates a clever tactic used by Best Buy to counter the rivalry from Amazon. 

                                                     Best Buy's 6 P's in Retailing

Chapter 6 - Consumer Decision Making

   Ever since the company was started, Motorola was a prominent contender in the mobile phone market. Their success among the consumers was seriously threatened when the iPhone was announced in 2007. Thereafter, Motorola tried various tactics to win back their customer base. Most of them were in vain, since non of them won over the customers that switched to other brands.

    However, after recent acquisitions, it has been introducing products that could change their fate in the mobile phone industry. When you evaluate the customer decision making process for a current Motorola product (Moto X), it would reveal the improvements that Motorola has made to make their products more appealing to the smartphone consumers.

   Today, smartphones have become a necessity, rather than a simple want among the consumers. A barrage of features have allowed consumers to do more than what they have imagined in the palm of their hands. As I have mentioned in the earlier posts, Motorola have taken a different approach to make smartphones. They have allowed their customers to create their own smartphone from the back plate to buttons. Most importantly, they have been able to keep the prices much lower than their competition. Those factors serves as a external stimulus that creates the "need" to buy their product.

   After the "need" is created, most customers do their research before purchasing the product. There are thousands of websites thats dedicated to review mobile phones and tablets, and those media outlets actively cover news regarding those devices. Some website leave it entirely to the customers to voice their opinion about the new phones they bought.

Even though, its labeled as user reviews, it is important to realize that it is difficult to find actual source on the internet. Anyone on the internet could create reviews at will. Therefore, it cannot be categorized as a non-marketing controlled information source, or a  marketing controlled information source.

Besides that, these outlets are being frequently used by smartphone consumers to pick the products they need. Also, YouTube is a popular source to get information about mobile phones.

Since their prices are lower than their competitors, customers are most likely to consider the Moto X over any other mobile phone. Moreover, features mentioned above are only available in Motorola phones. Therefore, it is highly unlikely to see customers evaluate alternatives in that price range.

Finally, after the purchase most customers have been giving positive feedback about the phone, except for some who had complained about the camera quality and other slight issues as you can see in the ratings above. Also, Many customers are glad to purchase this product, because it is an American made mobile phone. Most importantly, they are providing a great customer service from social media websites, and through their hotline. These services , and features that you get after purchase helps to satisfies Motorola customers in the long run.

Chapter 5 - Developing a Global Vision

Global Marketing

    Global marketing is an area where Motorola displayed a weak point as a company. Motorola has been marketing its products to U.S consumers ever since the company was started, but did not take any steps to market it outside the U.S. This issue prevailed until it was acquired by Google in 2012. After the acquisition, they introduced products such as Moto G which was targeted at emerging markets worldwide. They were focused to sell the Moto G in international markets with a low price point. 

   It was a successful strategy by Motorola, since Moto G did well in foreign markets as well as in the U.S.A. Additionally, one of Motorola's executive stated that Moto G is "the most successful, highest selling smartphone in Motorola's history." In contrast, they decided to keep the Moto X line up mainly in the U.S, even though there is a huge demand for it in Europe markets. 

  There is another factor that could play a huge role in their global marketing layout. The company was recently purchased by Lenovo which is a Chinese company that produces laptops and other electronic devices. This acquisition will benefit Motorola's long term global vision, since Lenovo is a hardware company that has strong ties with international markets. With their relationships, Motorola has a good chance of acquiring off-shore markets with minimum effort.

Lenovo's dominance in the international market & the smartphone forecast for coming years 

Job Outsourcing

   Motorola was in the center of debate when they outsourced their cell phone production facility in 2000. As a result, they laid off 1200 employees from Iowa and Florida production facilities. The  plan was initiated to cut down the manufacturing cost of Motorola's mobile phones. 

  However, they radically changed their approach in the recent years, as they decided to relocate a factory in the United States.  They resurrected an old Nokia factory to assemble their latest smartphone Moto X. Consequently, they hired 2500 employees to work in their factory, and they proudly advertised it as a product made in the U.S.A.  It was a bold move by Motorola, and it was admired by many Americans, since it opposes the trend of outsourcing local jobs. 

Workers At The New Motorola Factory 

Sources : New York Times: Motorola to Offer Moto G Smartphone Aimed at Emerging Markets

                Chicago Tribune: Motorola Outsourcing More Phone Output  

                The Verge: Made in America: A Look Inside Motorola's Moto X Factory

                

Chapter 4 - The Marketing Environment

Target Market

   In the early days, Motorola was mainly focused on selling its products to businessman worldwide. DynaTAC and StarTAC were used as productivity tools by the consumers, and Motorola successfully innovated those products to fulfill their customers needs. Prices were hefty, but their customers were willing to pay a premium, because of the added features. Hence, their target market was business personnel.


     However, they had a major setback after Apple's iPhone launch, and consequently lost the upper hand in the industry. Since then, they have tried to penetrate the market with various products ranging from low end to high end mobile phone market. Company's recent innovations seems promising, and it caters to both expensive, and low budget smartphone consumers. They have also added customization features that appeals to the young crowd.

Social Factors - Use of Social Media

   Motorola has been using social media tools, such as Facebook, Twitter, Instagram and Google + to communicate with its customers on a regular basis. Currently, Motorola customers have the option to get tech support and latest news from these social media outlets. They frequently use twitter as a place to publish their latest product promotions and discounts to customers.

 

 Product Promotions Through Twitter

    Recently, Motorola sponsored a promotion called "#MotoKandi Instagram Promotion."During the Sweepstakes Period, customers had to post a photo of either themselves at the "Escape from Wonderland Festival" or a picture of a bracelet from the Motorola Kandi Shop to their Instagram accounts including the hashtag #MotoKandi and mentioning @Motorola. At the end of the sweepstake, 7 contestants won cash codes for $50 where they could order tickets for concerts from a website called "Live Nation". This promotion was targeted at the young U.S demographic to draw their attention to Motorola's products. Moreover, it demonstrates Motorola's tactics of using social media as an advertising outlet.

An entree for #MotoKandi sweepstake

Sources : Facebook.com/Motorola

Chapter 3 - Ethics & Social Responsibility

     As a company that has been in business for more than fifty years, Motorola is in the limelight when it comes to corporate social responsibility. Therefore, Motorola has taken steps to ensure that they fulfil the needs of society at large. According to their website, they believe that "responsible business is good business." It simply expresses that their intentions are to gain profits while making a positive impact on society.

Sustainability

Accessibility Options in New Motorola Phones 

As for consumers, they have initiated a program to protect the privacy of their mobile phone users in a time where we have witnessed many privacy breaches in the United States. Motorola tries to accomplish this by a new privacy policy which informs the customers about the collection of data and how it is being used afterwards. It allows them to be transparent as a company that handles private data of millions of consumers every day. Furthermore, their design engineers have made phones with special features that allows people with disabilities to use Motorola phones with ease.

  

          Additionally, Motorola has taken the initiative to reduce the amount of greenhouse gases and carbon dioxide that emits from their facilities. They claim to have focused on sourcing energy from clean renewable sources such as wind power. Their ultimate goal is to help tackle the climate change and global warming as it is a global concern. Add to that, they have created a program where they recycle electronic devices for free of charge. This is an impressive program, since they are only obligated to recycle products that they sell in Europe. This program includes approximately 60 countries, and it allows any mobile consumer to send their device (not only Motorola products). Some devices are refurbished for reuse and then sent to developing countries where they are sold at a low price. They believe that it helps to boost access to communications. These initiatives validate that Motorola is practicing sustainability as a company.

Engergy Use of Motorola 

       Finally, Motorola has raised its voice against the controversial conflict minerals. Conflict minerals are minerals mined in conditions of armed conflict and human rights abuses, mostly in the eastern provinces of the Democratic Republic of the Congo, by the Congolese National Army, and various armed rebel groups. These minerals are essential components to create mobile phones: hence there is a rising demand for the substance. Motorola states they have implemented a due diligence program to identify and trace the minerals suppliers in their supply chain which allows them to buy conflict free minerals. They have also partake in a project called “Solutions for Hope” which is dedicated to source conflict free minerals as an organization. Moreover, they have engaged in many projects that serves to eradicate the conflicts surrounding minerals in Congo.

Mineral Mines In Congo

Cause-Related Marketing

        

  In 2007, Motorola joined with Make-A-Wish Foundation to create a cause-related campaign to promote its RAZR² handset and raise funds for the foundation. The campaign was called “RAZR² Wish Campaign”. Motorola donated $5 for each of the first 50,000 handsets that was sold, and to promote the campaign they engraved the battery cover with “WISH COME TRUE” slogan.
       

A Motorola Customer Supporting The Cause

   It was targeted at Motorola’s young customers and emphasized situations in which Motorola customers do good deeds. It was publicized on the internet, through posters and television with the tagline “Do something cool, do something good.” It was well received by the public, and eventually a total of $250 000 was donated to Make-A-Wish Foundation.

Sources : WPP:Campaign: RAZR2 Wish Campaign
               Motorola: Corporate Responsibility 

Chapter 2 - Strategic Planning for Competitive Advantage

Strategic Planning

Strategic planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving marketing opportunities. When you analyze Motorola's strategic planning in the past year, it is clear that they are focused to obtain new customers by providing a new set  of features and options from their latest products. Motorola's CEO Dennis Woodside emphasized in an interview that their new products stands as a feature packed and affordable mobile phone experience. This interesting take on smartphones is a result of strategic planning. It could affect the company's future and ultimately its financial success. 

This strategy of Motorola is evident in their new line of products. Their latest product, Moto X allow customers to build their own phone in variety of ways. It gives the option to choose unique colored back plates from several different materials. Not only that it also allows users to choose the colors for accents and buttons, such as volume rocker buttons, and power button for their device. They are currently advertising it as "a phone that's truly yours" since there are thousand ways to customize the Moto X. Moreover, it features voice activated commands which works from a proprietary SOC that always listens to the user’s voice when it’s turned on. It also has an attractive price tag of $399 which is considerably cheaper than what other companies offer. 

These features and options allowed them to differentiate their product from other leading brands, such as Apple's iPhone and Samsung’s Galaxy series. Therefore, Motorola earned a product differentiation advantage, since they were offering something unique and valuable to buyers beyond simply offering a lower price than that of the competition. 

Market Development

         
  Market development is a strategy that entails attracting new customers to existing products. Motorola failed to initiate this marketing strategy since they were focused on selling the Moto X exclusively in the U.S market. Therefore, Motorola was unable seize the foreign smartphone markets. They released Moto X in Europe on February 1st, after almost 6 months from the release. Add to that, Moto X is yet to make an appearance in the Asian market which has a grossing smart phone demand according to a 2013 Nielsen Research. In contrast, Apple’s iPhone and Samsung’s Galaxy devices were available to customers in Europe and Asia few days after U.S release. It helped them to gain the market share early, even though they did not offer the features that are available in Moto X. 

Diversification

Product diversification is a strategy of increasing sales by introducing new products in to new markets. Motorola implemented this strategy with their new product “Moto G”. It is a comparatively feature full smartphone at a remarkably low price. It has a similar design language to Moto X, but when it comes to price, globally unlocked Moto G costs only $179.This handy price tag targets emerging markets, such as Brazil, Chile and Peru. Moreover, it lures in customers with strict budgets, such as high school and college students. Motorola is not the first company to offer a cheaper solution for smartphone seekers, but the only difference is that Moto G is created with quality components compared to other phones in its category.  

Moto G

Sources : New York Times: Moto X Heads to Europe

                NIELSEN:The Asian Mobile Consumer Decoded

                New York Times: Motorola to Offer Moto G Smartphone Aimed at Emerging Markets

                YouTube: MKBHDHangout with Motorola CEO Dennis Woodside!
                YouTube: 5 Questions with Motorola CEO Dennis Woodside - CES 2014

Chapter 1 - Brief History and the Mission Statement

History 

   Motorola is an American company with a lengthy history in the telecommunication field.  It has contributed heavily to the mobile phone technology revolution that we are witnessing today. Prior to creating the first mobile phone, their maiden product was a "battery eliminator"  that was created in 1928. In a short span of time, they had a diverse product category, and by the end of the first half of the 19th century, they were selling car radios, and television sets to the U.S market.

Motorola indicating its contribution to the space program

    In 1947, the company changed its name to "Motorola" from "Galvin Manufacturing Corporation." It is a marriage between the words "motor", which represent cars, and "Victrola", which was a well-known gramophone brand at that period. Gradually, it became a popular brand name in the U.S households. 10 years later, Motorola partnered with Ford Motor Company and the Radio Corporation of America to create the eight track player for cars.

    The most significant event of Motorola's history could be its contribution to the Apollo space program. As a matter of fact, Apollo astronaut Neil Armstrong's famous message from the Moon was transmitted to earth by a radio that was designed by Motorola.

   

DynaTAC

  In 1977, Motorola introduced its first ever wireless telephone. Decade later, Motorola offered the first cell phone to the public which was named as "DynaTAC". It became an invaluable communication tool for businessmen in America, and it innovated a whole new product line up for consumers.

StarTAC

According to Motorola's website, the company kept innovating with plethora of products and services in various categories, such as, hands free cellular phone for vehicles, and world's first GSM cellular system. In 1996, they introduced the world's smallest and lightest wearable cellular telephone which ultimately created a trend for clam-shell cellphones. It was called "StarTAC", and it was a welcome addition after its brick-sized predecessor "DynaTAC".

     Despite its early success, Motorola was unable to keep up with the competition after the dawn of the new century. It was rivaled by smartphone manufacturers such as, Nokia, Samsung and Sony Ericsson. After Apple revealed the iPhone in 2007, Motorola was struggling to remain as the leader in its market. They tried to rejuvenate their obsolete mobile phone line up with Android powered mobile phones, but they failed to gain the edge. After its initial downfall, the company was losing market share. In 2011, Motorola split in to two independent companies, and Motorola Mobility was acquired by the tech giant Google.

      Last year, Motorola announced its first phone after Google's acquisition. It was named Moto X, and it was marketed as "The only smartphone assembled in the U.S.A.". It offered new customizing options, and it also featured touchless controls that allowed users to navigate their Moto X with voice. Moreover, it was priced at $399 which was considerably less than any other smartphone in its category. 

     Unfortunately, Moto X was not a commercial success, due to its strong competitors, and weak marketing tactics on Motorola's part. As a result of that, Motorola was sold to Lenovo by Google on January 29th of 2014. However, Motorola will remain as the pioneer of mobile phone technology in regards to its immense contribution in the early days of mobile technology.

Moto X

Motorola's Mission Statement

Motorola's mission statement is stated on their official website : 

"Motorola created the mobile communications industry. We invented most of the protocols and technologies that make mobile communications possible, including the first mobile phone, the first base station, and most everything in between.

Today, we are combining that pioneering spirit with Google’s vision and commitment to consumers. That’s why our phones run on Android, the world's most popular operating system. Android brings the openness that shaped the Internet to the mobile world. That’s also why we are the first company to bring smartphone production back to the USA and allow people to customize their own phone design.

'For the past 80 years, our engineers have thrived on invention, on finding new ways to solve problems. We continue to look for new opportunities to change people’s lives for the better through the magic of mobility."

It is apparent that the company has not made any changes to its mission statement after being acquired by Lenovo. Therefore, a change in the mission statement is possible in the near future. 

Sources :  Encyclopedia Britannica Inc. 
                 Motorola.com
                 BBC: Google sells Motorola Mobility unit to Lenovo for $3bn
                 Google: Facts about Google’s acquisition of Motorola
                 New York Times: How the Destinies of Motorola and Palm Grew Apart