Garmin: Marketing Research Paper

Garmin: Marketing Research Paper Richard Kelly 1. Executive Summary Summary Airspace regulations across the globe are becoming more restrictive with requirements for improved navigation solutions, more efficient communications, and robust traffic and collision advisory systems (Federal Aviation Administration, 2016). Garmin is well positioned with several products already in production and innovations on the drawing board to meet and exceed these changes. Target segments to be concentrated on are general aviation and business aviation. Marketing will focus on brand imaging and use of our business partners for more direct contact with our intended customers. Positioning Statement To aircraft operators who need the latest in NextGen equipment to meet changing airspace requirements, Garmin is the source for all your equipment needs with innovative and reliable devices ready to lead the way. 3. Overview of Company a. Mission Statement To be an enduring company by creating superior products for automotive, aviation, marine, outdoor, and sports that are an essential part of our customers lives. b. Product Description Garmin makes a complete line of general aviation and commercial aviation avionics, from basic instrumentation to advanced Electronic Flight Information Systems (EFIS). Specializing in NextGen avionics upgrades designed to meet future airspace requirements such as automatic dependent surveillance (ADS-B) out, GPS/GNSS RNAV, ADS-C, and controller-pilot datalink communications (CPDLC). High end displays integrate navigation data with moving map and traffic data, as well as, navaid and flight plan data. Competitors The avionics market is currently highly competitive. Potential market expansion is attracting many small start-ups as well as major players like Boeing and Lockheed. There is enough money to be made in our primary segments that they may decide to expand their product lines. Biggest expected competitors in our target segment are Aspen Avionics, Avidyne Corporation, Chelton Flight Systems, CMC Electronics, Free Flight Systems, Genesys Aerosystems, Honeywell, Inc., Innovative Solutions and Support Inc., L-3 Avionics Systems, Rockwell Collins, Inc., Sagem SA and Universal Avionics Systems Corporation (Garmin Ltd., 2015, p. 14). Each of these competitors has a strong presence in the market already and can use their established systems to effectively exploit any opportunities. SWOT Analysis Strength For expansion in both the commercial aviation and general aviation markets we have several strengths on which we can capitalize. One of our biggest is name recognition. While several of our competitors are well known in some aviation circles, we are better known for our direct to consumer products as well as our aviation products. We can capitalize on our existing manufacturing, distribution, and marketing channels by expanding and improving each. Weakness While regulatory agencies try to give long lead times before making major changes to the requirements of the technology, on occasion they will come down with short notice changes to meet some new performance capability. As with most technology, there is a lengthy lead time to incorporate a new change into our existing product lines. We will need to look ahead to anticipate possible emerging technologies and build in upgradability in as many products as possible to keep ahead of the competition. Rapid integration of new requirements can be difficult. Opportunity With the updated regulatory requirements coming to most airspace around the world, we have opportunity to expand our general aviation market. Most general aviation aircraft are not equipped to meet the new requirements. To meet this opportunity, we need to create affordable solutions that still meet performance requirements and can easily be used by general aviation operators. Products for general aviation should be universal enough for use in a wide range of aircraft with minimal modification to the aircraft. New requirements will also provide opportunities to grow our commercial aviation market. Threat Currently, one of our biggest threats is litigation based on product malfunction and patent infringement. Lesser threats to the bottom line come from fluctuations in currency exchange rates and political unrest in various parts of the world (Garmin Ltd., 2015, pp. 19, 21). 3. Market Segment a. Primary We will primarily continue to target business class commercial aircraft. b. Secondary Our secondary segment will be general aviation aircraft but we will be targeting them at close to the same level as our primary segment. c. Rationale While the general aviation market has a larger number of aircraft, the number, type, and price structure for the equipment has a lower rate of return than the commercial market. It is hard to expect consumers to pay $20,000 or more on a plane that cost $40,000. We expect they will opt for smaller, more affordable upgrade. The commercial equipment market has a wider range of upgrade opportunities many of our current products already meet. In addition, the higher-grade equipment has some built in options and upgradability. Business operators will be looking to lead turn these requirements, some of which have already been implemented in foreign markets. Last, commercial aircraft often are provisioned for two pilots. With the right marketing, there is opportunity to provide a more robust flight deck upgrade. 4. 4 Ps, Branding Strategy a. Product Our product is a complete line of aircraft avionics including: GPS-enabled navigation, VHF communications transmitters/receivers, multi-function displays, electronic flight instrumentation systems (EFIS), automatic flight control systems, traffic advisory systems and traffic collision avoidance systems, terrain awareness and warning systems, instrument landing system (ILS) receivers, weather radar, surveillance products, audio panels, cockpit datalink systems and more (Garmin Ltd., 2015, p.10). b. Price We will continue with our current pricing structure with affordable upgrades, standalone equipment, and contracted rates for larger customers. While we have strong competition, we will adjust our price structure, as required, to remain competitive. The target segments we are working with are captive, they are required to upgrade or will no longer be able to operate their aircraft. With that, they are generally willing to pay a reasonable and competitive price. c. Place (Distribution) Plan We currently have an established distribution system: Garmins retrofit avionics and aviation portable products are sold through select aviation dealers around the world and, in the case of aviation portable products, also through catalogs and pilot shops. Garmins largest aviation dealers include Aircraft Spruce Specialty Co., Elliott Aviation, Gulf Coast Avionics Corp., Sarasota Avionics, and Sportsmans Market. Avionics dealers have the training, equipment and certified staff required for at-airport installation of Garmins avionics equipment. (Garmin Ltd., 2015, p. 13) It is suggested that we partner also with AP license holders by providing incentives and training to encourage them to suggest our products to aviation customers that are having periodic maintenance accomplished on their aircraft. d. Advertising and Sales Promotion Plan We have an established marketing strategy and a dedicated marketing department which will continue to use existing marketing campaigns. In addition, we suggest that online presence be increased on aviation related websites highlighting our ability to meet NextGen requirements specific to each market area. Advertising in trade magazines is highly effective, as well as, partnering with our distributors, which we believe will be the most effective. We would expect that the recommendations of our maintenance partners will also be effective. Use of social media expands our customer contact through our Facebook, Twitter, and Instagram venues. We need to position our value proposition so that when they think of upgrading, they think of us first. Additional opportunities exist using sponsorships and displays at trade shows. We should leverage these by use of product demonstrations and contest giveaways to generate leads for our sales force (Garmin Ltd., 2015, p.42). Branding Strategy The Garmin name is synonymous with navigation technology. Our strategy is to paint in the consumers mind the image: Garmin Leading The Way. We believe we are uniquely positioned to provide the values of quality, safety, and innovation to lead the way. Our name says it all with our North compass indicator, Leading The Way. (Garmin Ltd., n.d.) References Federal Aviation Administration. (2016). Performance Based Navigation. Retrieved from https://www.faa.gov/nextgen/update/operator_investments_and_airports/operator_investments/pbn/ Garmin Ltd. (2015). 2015 10-K form. Retrieved from http://www.garmin.com/en-US/company/investors Garmin Ltd. (n.d.). Logo [Graphic]. Retrieved from http://www8.garmin.com/company/newsroom/mediagallery/items.jsp?product=999-99999-11agree=ongetImages=Get Thurber, M. (2015, January) Avionics for NextGen. Aviation International News. Retrieved from http://www.ainonline.com/sites/default/pdf/2015-01-avionics-for-nextgen.pdf