1 Introduction to GoPro Inc. Figure 1: GoPro logo GoPro, Inc. (GoPro), incorporated in 2002, produces cameras andmountable and wearable accessories (Schmidt & Thompson, 2014, p. 3). Its merchandiseinclude Cameras, drone and image stabilization, virtual reality, mounts andaccessories, software applications and services. GoPro cameras are capable ofcapture and record in high quality through a wide angle lens and they can beconfigured to feature in an automatic way with a minimum intervention, or to becontrolled in remote mode (successstory.
com, 2017). GoPro become theearly market leader in portable cameras and had cornered the market viaextraordinary hardware and delightful designs. The cameras were durable, may beused in all kinds of environmental conditions, and taken the action sportsmarketplace to lifestyles. The cameras were used to movie the death-defying feats of actionsport athletes, who began to self-produce small clips that showed them catchingwaves, base jumping, and “going pro” in their diverse sports activities (successstory.com, 2017). The corporation hasconstructed its personal network, having loyal fans, and creating products thatgive sportsmen the ability to share their talents like in no way before. Thecompany created cameras that have been a staple amongst modern athletes and wornby using the most famous athletes in action sports (Galleso, 2016, pp. 20-25).
It uses a group of location-based sales representatives topromote its products in the United States of America concentrated on sports activitiesand consumer activity markets. GoPro products are bought globally via shops,wholesale distributors and on the company web site (Galleso, 2016, pp. 20-25).2 GoPro – Differentiation Strategy as a Leader inConsumer Electronics Market2.1 What is differentiation strategy?Based on Porter’s five competitive forces, there are threepotentially successful generic strategic approaches to outperforming otherfirms in an industry,ü overall cost leadership strategyü differentiation strategyü focus strategyThe second strategy, differentiation strategy is one ofdifferentiating the product or service offering of the firm, creating somethingthat is perceived industrywide as being unique.
Approaches to differentiatingcan take many forms such as design or brand image, technology, features,customer service, dealer network or other dimensions. Ideally the firmdifferentiates itself along several dimensions (Porter, 2008, p. 37).2.2 Key strengths in differentiation strategyFirms which rely on a differentiation strategy usually have thesestrengths (Paley, 1999, pp. 87-88). ü Performing leading scientific researchü Highly skilled and creative product developmentteamü Strong sales team or network with excellentcommunicationü Corporate reputation for innovation and qualityof products GoPro follows its own differentiationstrategy, highlighting the key strengths mentioned above.
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These key strengthshas been successfully influenced to the competitive advantage of the company. 2.2.1 Scientific research in GoProTo gradually differentiate the products, the scientific researchis essential. GoPro is a leading scientific researcher in consuming electronicsindustry. GoPro follows a different aspect in R investments.
They areheavily invest in research and development compared to other consumerelectronics manufacturers. The following statistics reveals the Rexpenditures by GoPro from 2012 to 2016 (Portal, 2017). Figure 2: GoPro’sresearch and development (R&D) expenditure worldwide from 2012 to 2016 (inthousand U.S.
dollars)Compared to the big player ‘Apple’, GoPro has investedapproximately five times than Apple in research and development. Figure 3: GoProR&D investment in 2014 (in thousands of dollars) Figure 4: Apple R&Dinvestment in 2014 (in thousands of dollars)As a result of these investments more than 490 patents has beenowned by GoPro including both software and hardware related patents (FreshPatents, 2017).2.2.2 Product development team in GoProGoPro processes a young skilled and creative team of around 110experts (medium.com, 2016).
Their approach israther different from a conventional design team as they have no resources atthe startup and they built their own algorithms, software, hardware andservices. The design team works closely with entertainment and marketing groupsto achieve their innovative ideas.GoPro’s creative team has certain qualities such as neverstopping redesigning, making it multitasker and prioritizing convenience andshareability. As examples now they have developed the camera with thecapability to capture videos and photos simultaneously, can shoot photos bothin air and underwater with different types of mountings and even cameras arebuilt with photo sharing ability with no special software needed based on Wi-Fitechnology (Winfrey, 2014).
These differentapproaches of the product development are specific areas in theirdifferentiation strategy.2.2.3 Sales team in GoProGoPro has a large worldwide sales team with compared to actioncamera competitors like Xiaomi, Sony, JVS and etc. The company providesexternal training seminars for every retail associates evaluating themseparately. They provide necessary marketing and technological knowledge toassociates to deal with customers confidently. And every retail associate mustuse GoPro training app on their personal devices on the retail floor.
This issomewhat lifestyle focused digital training solution. This differentiation hasbeen lead the company into a remarkable position. Because of this skilled salesteam, GoPro’s revenue has been increased rapidly which is pointed out byfollowing statistics. Figure 5: GoPro’srevenue since 2010 (businessinsider, 2016)2.2.4 Reputation for quality and innovation towardsGoProGoPro produces quality action cameras with innovative features.The customer feedback for quality and innovation is quite high for GoPro. Thatis why this brand lasts for more than 15 years in the action camera market.
Even the customer feedback for GoPro cameras in major online marketplace’Amazon’ is quite good. Figure 6: GoPro HEROblack has been scored 4/5 stars in AmazonIn every minute at least one video is uploaded to YouTube, thusthe brand is automatically marketed by the consumers (Winfrey, 2014).This reveals the trust, reliability of the cameras among consumers in one angleand on the other angle different marketing strategy followed by GoPro. 3 GoPro – Marketing Mix3.
1 What is marketing mix?According to Philip Kotler whom considered as father of modernmarketing “Marketing Mix is the set of controllable variables that the firm canuse to influence the buyer’s response” (Aziz, 2017, p. 88). To market productsor service, using a mix of techniques and tools is essential to get the besteffect, depending on the products or services and the customers targeted. The 4Ps of marketing mix are as follows,ü Productü Priceü Placeü Promotion Figure 7: Themarketing mix (Baker, 2003, p. 287)3.2 Product mixThe products are not only the things that customers are lookingfor, but also the services and intangibles that surround it. As the customers arelooking for choices, the manufacturers have to offer consists of a range, aselection of choices, products that complement each other and make itattractive for the customers to come and buy (O’Kane, 2011).
GoPro introduce a product mix with every innovative product thatthey are offering. GoPro has their own accessories such as smart remotes, LCDtouch backpack, battery backpack and applications and software. Packaging ofGoPro is simple but effective, therefore it consumes less time to pack orunpack the camera and its accessories. Customers are willing to pay these typeof product mix rather than buying a traditional video camera. This product mixconcept has been worked fabulously for them. GoPro is a distinctive brand namethan the other brand names and also its name ‘go pro’ gives a feeling to thecustomers that this brand is superior to others.
“GoPro Be a HERO” this brand theme of GoProwhich motivates customers and easily goes into customers mind. It tellsconsumer to go and do something new and be a hero. It is perfectly match withcompany’s image of adventure. Therefore it can be concluded that product mixadopted of GoPro highly contributes to its branding establishment.
3.3 Price mixWhen an organization decides a price for their products orservices they should take the required profit margins and the probable pricingresponse of competitors into account. The organizations have to deviate fromestablished prices by means of special offers, discounts, and reductions inrates to gain competitive advantage. Price of GoPro cameras depend on their features and quality. Thecheapest GoPro camera is Hero 3 White Edition which was priced £199.99 and themost expensive GoPro camera is the Hero 6 Black Edition at £399.99 during introductionstage. GoPro has had the advantage of profiting from premium pricing previously.
But when cheaper alternatives as Xiaomi enter to the market gradually the priceis being decreased by the company focusing towards a penetrating pricingstrategy. But they still have the first mover advantage. To increase sales theyoffer free shipping during Christmas holidays. By the way GoPro followsdifferent price mixing techniques to be in the game establishing its brand. 3.4 Place mixThe location where the business will be established is meant byplace. In most cases, customers will never come to the place of business to buya product. That is where channels of distribution must be properly identifiedfor the products and services.
GoPro products can buy online though company website or otheronline retails websites such as Amazon. This method is attractive as within onecall or a mail customers can pick up their orders within 24 hours. GoPro usespecialty camera, sport and electronics retailers to distribute their productsother than their own retails. Distributing products by major retailers andspecialty retailers is a good way to sell product because customers havepositive attitude on them including GoPro products as well. These types ofplace mixes support the brand to stabilize in the competitive market.3.
5 Promotion mixThis is the stage when company puts its entire effort onmarketing. Marketing never starts or ends with only advertising, it is only apart of promotion activities. Other promotion activities include directselling, public relations, internet, social media, sponsorship and personalselling. To promote GoPro cameras the company utilizes different contest throughtheir website. Anyone who has GoPro camera can enter into this contest byadding videos or photos to the video or photo of the day contests. GoPro usespaid online videos ads in video hubs such as YouTube, Dailymotion and etc.
totargeted audience. Partnerships and sponsorships are the major promotionactivities done by GoPro. GoPro has partnered with Red Bull to increasepublicity and they gain media attention through events sponsored by them mostlyathletic events. They sponsor the most famous sport football and allow thepayers to mount GoPro cameras on their heads in National Football League. Thereforethe audience, viewers can watch the sport in various angles feeling the actuallive competitiveness of the game. This will change the mind of such footballfellows to buy such cameras. By all these promotion mixing methods GoProestablish its brand worldwide. 4 Global Distribution Challenges in PenetratingAsian MarketsAsian market is a challenging place to do businesses.
GoPro willhave to face wide range of global distribution challenges in penetrating Asianmarkets within five regions of Asia.Unlike Europe, Oceania and America, the cultural, geographicaldifferences are very high in the regions of Asia or even within a country.These differences will be a big challenge which will be faced by GoPro whenexpanding their businesses in Asia. But GoPro will like to business in Asia dueto rapidly changing demographics, increased consumer spending, rising incomesand open business environment. GoPro need to understand that Asian consumershave very different needs than consumers in their home markets. Insufficientknowledge of geographical and cultural differences in Asian market could act asa barrier for entering Asian market for GoPro. In Asia most of the people aremiddle class people those who cannot spend for consumer electronics fullypotentially, but healthily. Therefore GoPro cannot catch the market with highprices, they have to lower the profit margin.
This is one of critical globaldistribution challenge that GoPro may have to find solutions. There are plenty of alternatives in Asian market instead of GoProaction cameras mainly in East Asia and South East Asia. There are plenty ofGoPro clones in Chinese market as little as $48 operating almost similarly as GoPro’s 4K-capable HERO 4 Silver priced at $399. Xiaomi, the biggest competitor of GoPro in Asiaintroduced an action camera with same features with 1/3 lower price. Thus ifGoPro enters to Asian market, they have to compete with these alternatives.IPR infringement is common issue inAsia. This is one of biggest challenge that GoPro will face in globaldistribution of action cameras in Asia.
One of other challenge in global distribution in Asian market foraction cameras is that custom taxes and logistics issues. Customs andregulatory requirements for different countries are different in Asia. Import duties and taxes related to foreigntrade and business is high in many Asian countries to encourage local industries.Logistic issues in customs mainly arise in South Asian countries such as lowprocessing speeds, delays in custom clearance, ambiguities in productclassification, numerous internal check posts, city entrances, and otherregulatory stoppages. Government policies and regulatory requirements are different fordifferent countries. And another fact is that the government policies arefrequently changed in Asian countries. This will badly effect on consumerelectronics manufacturer like GoPro because this might be end up in losses.To catch the Asian market, qualified sales representatives andother executive staff must be hired.
It is difficult to recruit qualified staffmembers as a foreign company in an unknown region. Because those hired membersmust possess the language skills and critical strategic thinking as required.This will directly affect the product distribution in those Asian countriesbecause the quality of the staff will end up in increase in sales. 5 Recommendations for overcoming future challengesfrom the cheaper alternative brands entering the market.New cheaper alternative brands of action cameras enter to theaction camera space combined with older rivals in present.
GoPro competes withglobally recognized brands such as Canon, Nikon, Sony, Panasonic, Polaroid andXiaomi today. These companies introduce cheaper alternatives with excellentfeatures for customers. Therefore under this competitive pressure if GoPro isnot differentiated, the company cannot survive in the market. For overcomingfuture challenges GoPro can follow different strategies. One such strategy is to use dual distribution strategy where abusiness supplies its products or services both directly and indirectly to theconsumers. This is very simple strategy, the producer sells the products directlyto the end users by his distribution channels and as well as to the retailers.
But this approach is risky. Apple adopts this technique to its global distributionof its products. This strategy will ensure the brand is common in the marketwith easy access to the customers to purchase them, challenging the cheaperalternatives in the market.Consumers reach cheap alternatives due to the user friendlinessof the software features on the action cameras. According to the customerreviews for its video editing software including android software, the userfriendliness should be improved. For that GoPro has to invest heavily onsoftware innovations. If company introduces facilities to edit raw videoscaptured by the devices itself, quickly trimming facilities and onlinescreaming facilities; it is obvious that customers may attract to the productsthan the cheaper alternatives.
If prices cannot be lowered, focusing on the ways of ahead overthe cheap brands in terms of quality and customer loyalty is a good strategywhich can be followed. It is true that consumers care about price but more onquality of the products that they are paying for. The producers must justifythe value that consumers are willing to pay. In most cases customers arewilling to pay higher prices not just for a product but for a better customerservice. Most players have lost the customer base because their rivals have abetter customer services.
Thus GoPro must concern about this fact whencompeting with other brands. In other way if prices cannot be lowered to complete with cheapalternatives, then GoPro can separate themselves as the premium offer in themarket. Thus GoPro needs to invest in branding and customer service to make itstick. This may end up in high end customers but higher margin of profit thanthe competitors. Mobile and visual storytelling are the clear megatrends inconsumer electronics presently. GoPro serves as storytelling solution but itmust be mobile centered. To do that GoPro has to introduce or extend the memorycapacity, battery life, display screen, image stabilization, upload and watchinstantly, accessories such as wide angle lenses and etc.
GoPro has to find away to address a different market rather than of action sports to overcomedifficulties from the cheaper alternatives.Over 25 million of GoPro cameras hasbeen sold in the world. To avoid GoPro existing customers go for cheapalternatives, GoPro have to educate and excite them about the simplicity oftheir new hardware and software. As an initial step GoPro can announce Trade upinitiative, offering discounts to them. They have to directly contact them todemonstrate the mobile app experience to make them feel that usage of GoPro isan extension of smartphone.Joint venturing is another strategythan can be adopted to be competitive with cheaper alternatives.
When GoProdeals in global market, it can make such partnerships to be a common brand inlocal markets in different countries. By doing so GoPro can cut down operatingcost, get local sales teams, reduce import taxes which leads to lower theirprices ultimately.Intellectual property rights infringement is common in Asianmarkets.
When a new technology is introduced this will happen automatically andthen cheaper alternatives come to the market. By protecting intellectualproperty rights, it is harder to cheaper products to enter the market with thesame features. This will give GoPro a competitive advantage as they are good atin R&D. legal and practical measures are available for protect their IPR.This will be a good tactic for competing with cheaper alternatives. 6 ConclusionGoPro camera is one of the best action camera in these days. Thoughthere are several different rivals that are thought of as potentialcompetitors, the GoPro remains as the leader. Even though it is an electronicdevice that will have an effect on people’s social life, threatens theirprivacy, it has got lots of advantages.
In near future GoPro has to face a verycompetitive environment due to smart phones and alternative cheap cameras. Theymust evaluate their weaknesses and opportunities to be survived in the consumerelectronics market. Finally, it seems that the GoPro remains receptive all newtechnologies, and adapts its products to them. This might be one of the reasonfor its’ great success in the market.
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