marketing mix of motorola

7/22/2019 Marketing Mix of Motorola

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INDEX

A. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

A.1. History of Motorola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

A.2. Objectives of Motorola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

A.2.1. Objectives of Motorola Mobility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

A.2.2. Objectives of Motorola Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

B. MARKETING MIX OF MOTOROLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

B.1. Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

B.2. Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

B.3. Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

B.4. Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

C. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

D. BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10


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A. INTRODUCTION

A.1. History of Motorola

In 1928, the bankrupt Stewart Battery Company's battery eliminator plans and manufacturing

equipment were bought by Paul V. and Joseph E. Galvin at auction. Galvin Manufacturing

Corporation set up a shop in Chicago, Illinois, USA. The company owned 565$ capital and five

employees. The first product of the company was a device called B battery eliminator which enabled

battery and powered radios.

In 1929, Galvin Manufacturing was affected by Great Depression. After the stock market

crash in US in 1929, the company was close to failing. The founder learned that sets were installed in

cars by some radio shops and with this inspiration Paul. V. Garden challanged his employees to design

a cheap car radio which could be installed in the most vehicles. As a result, a working model of the

radio was demonstrated at Radio Manufacturers Association convention in 1930 and the company was

saved thanks to orders.

In 1939, television was introduced to Americans and in 1939, Motorola as one of the several

pioneering television manufacturers started research and development for television. However, the

company stopped its research and development of televisions in 1941 to concantrate on war-related

projects such as portable two-way radio. Then, they resumed work in 1945 and produced 100,000

televisions in 1947.

After the Wordl War II, the US economy recovered rapidly because wartime production

restrictions were removed. As a result, Americans were interested in buying many products, and

television were one of these products. In late 1950s, the company combined stereos which were first

introduced in mid-1958, radios and television sets in single units. Motorolas sales grew exponentially

and its name became synonymous with entertainment in the air.

In 1960s, Motorola contributed to NASA projects including transponders on board Mariner II,

involment in design, test and production of sophisticated electronics of Apollo 11.

In 1973, a protatype of the worlds first portable cellular phone was demonstrated by

Motorola. In 1974, Motorola involved in microprocessor race by introducing its first microprocessor.

In 1983, an approval was given to the worlds first commercial handheld cellular phone,

Motorola DynaTAC, by US Federal Communications Commission. In 1987, Motorola stopped

producing car radios.


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In 1990, the worlds first HDTV technical standard was proposed by Motorola. In 2000,

General Instrument was acquired by Motorola. In 1995, Motorola announced its first cable modem. In

late 90s, Motorola completed a Voice over Internet Protocol (VoIP) cellular phone call.

In 2001, Motorola introduced a metal portable cellular phone with Internet access, text

messaging and voice-activated dialing.

In 2011, Motorola Mobility Holdings, Inc. announced it has completed its spin-off from

Motorola, Inc. Motorola Mobility consists of two technology businesses, which are mobile devices

business and home business. The home business provides digital set-top boxes and end-to-end video

solutions, and the mobile devices business provides smartphones.

On August 15 of 2011, Google acquired Motorola Mobility

A.2. Objectives of Motorola

A.2.1. Objectives of Motorola Mobility

Motorola Mobility surprisingly has not decleared its mission, vision nor objectives on its

website. From the company profile description, it can be said that the objective of Motorola Mobility

is delevoping products that transform customers lives, making them easier, smoother and more

enjoyable.

A.2.2. Objectives of Motorola Solution

1. Minimizing Manual Effort and Duplication

2. Increasing Throughput and Velocity

3. Creating Systemic Efficiency for Scalability

4. Providing Commercially Valuable Information


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B. MARKETING MIX OF MOTOROLA

Marketing mix is a set of tactical tools for a firm to provide what is wanted by target market.

This concept was suggested by McCarthy in 1960. 4Ps include product, price, place and promotion.

These elements can be adapted in order to generate and sustain customer satisfaction. To satisfy

customers, a business must sell the right product/service at the right place at the right price by using

the most effective forms of promotion.

Product means goods or services that a company offers to the target market. Its factors are

variety, quality, design, features, brand name and packaging. Price is the amount of money that a

customer must pay to purchase product or service. Its factors are list price, discounts, allowances,

payment period and credit terms. The term place includes activities that make products or services

available to target market. Its factors are channels, coverage, locations, inventory, transportation andlogistics. The term promotion includes all techniques that a company uses to communicate with

customers to persuade them to buy their products/services. Its factors are advertising, personal selling,

sales promotion and public relations.

B.1. Product

Product is the first element of marketing mix. After deciding on product, other elements can be

taken into account. Because all other decisions depend on this element, product is the critical element

in the mix.

Motorola is a well-known leader in wireless and broadband communications. The company is

committed to help people stay connected to people, information and entertainment. Motorola states

that they are achieving this through designing and delivering must have products, must do

experiences and powerful networks.

Motorolas mobile phones are the most familiar products to customers. Most popular Motorola

smartphones are shown in the following figure.

Figure B.1.1. Motorola smartphones


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One of the reason Google acquired Motorola is combining Motorola Mobilitys hardware

expertise with Googles expertise and as a result achievinginnovation. Another reason is protecting

Android environment since Android and its manufacturers are threatened through lawsuits. Although

it has been almost two years since Motorola Mobility was acquired, Motorola has not released an

innovative smartphone. However, according to the news of The Verge, Google's CEO Larry Page is

hopeful. He states that Having just seen Motorola's upcoming products myself, I'm real excited about

the potential there. In just under a year, they have accomplished a lot, and have impressive velocity

and execution. (Dieter Bohn , Google CEO Larry Page hints that next Motorola phones will focus on

durability, http://www.theverge.com, 2013)

Result of not producing smartphones that are innovative, different than competitors existing

smartphones can be seen through statistics. A research company called IDC published a report about

top five smartphone vendors, shipments and market share in 2012. Motorola is not in those top five

manufacturers.

Figure B.1.2. IDCs report on smartphone vendor statistics in 2012

B.2. Price

This element of the mix determines what a provider is paid. It has an important effect on the

level of customer interest. High prices might cause inadequate sales and low prices might give an

image of a low quality of product.

In the technology sector, prices usually depend on product life cycle. In the introduction phase,

prices are high in order to cover research and development costs. So as to initiate growth stage, prices

are reduced and as a result sales are increased. In the maturity phase, there are offers to raise the sales.

In the decline phase, the products successor is introduced.


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As market introduction approaches, there are two popular approaches, price skimming and

penetration pricing. The idea of price skimming is setting the price high relative to the competition.

This approach is designed to cover high research and development cost and marketing expenses. Price

skimming is used in pricing of new technology products. On the other hand, the idea of penetration

pricing is setting a relatively low price in order to maximize sales and gain marketshare. This approach

is used when research and development and marketing expenses are low and when new competitors

enter the market fast. As an example, Motorolas Q smart phone was introduced to the market at a

penetration price of $199 after rebate through Verizon. By the help of this approach, the mobile

phones sales were boosted.

B.3. Place

The term place is related to techniques of transporting and storing goods in order to makethem available to the customer. In short, it deals with how the product or service is delivered to the

customer.

In order to buy a Motorola smart phone, there are various ways. The first way is independent

retailers. Those retailers generally offer variety of brands and customers need to go to retailers shops

to buy. The second way is buying from network providers such as T-Mobile, Vodafone etc. When the

product is bought, a monthly payment is done for both product and monthly plan. However,

nowadays, trend is to buy online. It is the third way to buy a Motorola smart phone. Buying onlineusually provides low prices comparing to retailers prices since online shops have lower expenses

comparing to a high street establishment. The most well-know online shopping websites are E-bay and

Amazon.

Motorola often gives priorities to some certain retailers. As an example, the pink RAZR was

exclusively available through Carphone Warehouse in UK when it was first introduced.

On the website of UK Motorola, it is not possible to order phones directly. When How to

Buy button is clicked, some options are shown. Those options include Phones 4 U, T-Mobile,

Orange, Amazon, Argos, Buy Mobile Phones, Clove Technology, Expansys, Fonehouse, Tesco,

Unlocked Mobiles, Very and Virgin Mobile. Some of them are retailers, some are network providers

and some are online shopping websites.

B.4. Promotion

One of the most important promotion type is public relations because it builds the public

image of the company by activities such as helping people to understand company and its products.

Motorola uses social media, Facebook and Twitter, actively in order to announce news, campaigns,


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answer customers questions, celebrate important days etc. As an example, Motorola Canada and

Motorola Australia are examined. Other than this, the company provides live chat, e-mail, call or

forum options to provide help on its website.

Figure B.4.1. Activities on Facebook pages of Motorola Canada and Motorola Australia

Figure B.4.2. Activities on Twitter profiles of Motorola Canada and Motorola Australia

Sponsorship is another way to generate publicity, reach a large audience and let people see the

brands logo. The sponsorship can be done through financially or providing the companys products or

services in order to support an event, person or organization. For example, Motorola provided its

headsets to NFL coaches for 13 years. In 2011, Motorola Mobility partnered with New York Road

Runners so as to promote MOTOACTV fitness device which provides athletes to track their workouts,

set performance goals and listen to music.

Figure B.4.3. Motorola sponsorships


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One promotion type is advertising. Advertising is used to demonstrate a particular product or

service to people. It can be done through commercials, brochures, billboards, e-mails. As an example

of commercial, Motorola used a TV advertisement to show people how MOTOROLA DEFY can

survive difficult situations. In the advertisement, the phone is dropped to the floor, left on the beach

and pool water is splashed on it. The day after, while everybody is having hangover because of

partying, the phone keeps ringing on the floor next to a broken vase. In the end, the phone is shown

and Its life proof. message appears.

Figure B.4.4. A screenshot from MOTOROLA DEFY TV advertisement

In our everyday lives, we witness billboard marketing. Billboard advertisements are designedto catch eye of the potential customers. It costs less than TV advertisements. Furthermore, the

advertisement remains on display day and night while thousands of citizens are passing by. Motorolauses billboard advertisements effectively.

Figure B.4.5. Motorola billboard advertisements


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When it comes to corporate social responsibility, Motorola Mobility is sensitive toenvironment. Motorolas Global Packaging teams packagaing innovation is driven by Reduce Reuse Recyle. While the team is designing and engineering product packages, they aim forminimizing environmental impact. In addition, they are working with their carrier partners to reducethe weight and volume of their retail packaging. Motorolas packagaing initiatives involves:

Use of FSC certified papers

Use of water-based adhesives

Use of 100 percent recycled content pulp packaging parts, replacing plastic parts

Use of soy/vegetable based inks as well as zero VOC UV inks

Program-to-program reduction initiatives

Increasing packaging density per pallet (Motorola.com, 2013)

As an example, in 2011, Motorolas team achieved 11% volume reduction in the packaging of

Droid Razr for Verizon.

Other than packaging, Motorola Mobility design its products in compliance with materials

regulations and energy performance. The company works on reducing potentially hazardous materials.

To prevent waste and reduce carbon emissions, Motorola uses recycled plastics. Designers focus on

products that can be easily recycled. Motorola's mobile phones meet or exceed the European Unions

Waste Electrical and Electronic Equipment (WEEE) directive recyclability target of 65 percent. The

company also includes customers to cycling and encourage them to return their handsets through

providing prepaid postage labels on the website, organizing events for electronics collection at its

facilities, offering periodic incentives, placing collection containers in its service centers and so on.


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C. CONCLUSION

Since Motorola Mobility currently has no mobile phone market share in Turkey, I did not have

much idea about the company. After Google acquired Motorola, the company drew my attention and I

started to read news about it. My interest in tablets and mobile phones led me to search Motorola

products in detail. However, I was not able to buy their product because their products are not sold in

Turkey. In addition, the company does not have many fans in Turkey. Their Facebook page currently

has 135 likes.

When examined worldwide, the company needs innovation, a product which would make

mobile phone followers surprised. Even Nokia rose from ashes in smartphone market, and I believe

that by the help of the software knowledge of Google, Motorola might have a big share in the market

by producing innovative devices.

Motorola smartphones are not available everywhere. They have offices in limited countries,

and after Google acquisition, the company even closed its offices and stopped operations in many

countries. This situtation makes it difficult for people to buy Motorola products. Customers can buy

Motorola mobile phones from other countries, even pay extra taxes to unlock them, and take the risk

of sending the phone to purchased country in case of repairment required. The question is Is it

worth?

Motorola products and other brands products which have similar features have similar prices.

Nowadays, being in social media is compulsory for big brands. As it seems, Motorola uses

social media successfully to help customers and share news. Its advertising approach in countries

which the company pays attention seems successful.

In my opinion, Motorolas marketing mix needs improvement due to product and place

elements. With a little ambition, it is possible to see Motorola Mobility in top 5.


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D. BIBLIOGRAPHY

1. Motorola. History. Available at: http://www.motorola.com/us/consumers/About_Motorola-

History/About_Motorola-History,en_US,pg.html (Accessed: 1 May, 2013)

2. Motorola Solutions. Core Objectives. Available at:

http://ap.motorolasolutions.com/apac/retail/sea/warehouse%20clubs%20%28and%29%20hypermart/b

usiness/coreObjectives.aspx (Accessed: 1 May, 2013)

3. Drummond, Graeme and Ensor, John. (2005). Introduction to Marketing Concepts.

Burlington:Elsevier Butterworth-Heinemann

4. Google. Facts about Googles acquisition of Motorola. Available at:

http://www.google.com/press/motorola/faq/ (Accessed: 1 May, 2013)

5. The Verge. Dieter Bohn , Google CEO Larry Page hints that next Motorola phones will focus on

durability. Available at: http://www.theverge.com/2013/4/18/4239970/google-ceo-larry-page-hints-

that-next-motorola-phones-will-focus-on (Accessed: 2 May, 2013)

6. Ferrell, O. C. and Hartline, M. D. (2008). Marketing Strategy. 4th ed. USA:Thomson South-

Western

marketing mix of motorola

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