Marketing Audit

Executive Summary

Ten years ago, Palm, Inc. captured the imagination of road warriors everywhere with the first Pilot connected organizer, a mighty 5.7-ounce combination of calendar, contacts, to-do lists and notes. Today, having shipped more than 34 million mobile-computing products, the company continues to improve the lives of people and businesses the world over, staying true to one guiding vision: The future of personal computing is mobile computing. (Palm Inc website.). The Audit explores the environmental aspects , like where does palmOne stand in the current market. PalmOne, which was created from the 2003 merger of Palm and its former nemesis Handspring, has found a way to successfully capitalize on the next big thing in consumer electronics: the smartphone. Thanks in large part to the popularity of its Treo 600, a combination phone/messaging device/Web browser, palmOne's revenues in the first quarter of fiscal 2005 surged 62% from a year earlier. PalmOne competitors such as Sony and Dell , larger players on opposite ends of the handheld market, over the years have moved aggressively to develop products with flashy new features or tempt new customers with low prices. The objective of palmOne is to be the leader in the handheld computing and communications device market. The company believes that overtime, majority of mobile phones will be smartphones. Year-over-year the company grew revenues by approximately 39 percent and increased operating income by more than 10-fold, delivering a record number of smartphones to its carrier customers. The strategy of the company is to Develop, Capitalize on Industry trends, Manage a diversified portfolio of mobile computing products and Build the brand.palmOne has also been targeting the healthcare and educational institutions to provide the Treo smartphones to use it in their network and make use of the bulk of features that the smartphone provides to effectively manage their businesses. Every business traveler carries or wants to carry a Treo smartphone. The audit examines SWOT analysis and explains how it has its strengths on the smartphone market and how it lacks on marketing and advertising on its flagship product of the PDA market. The paper also describes the 4 Ps and suggests that the company executes the market research results and think about the Service Added Differentiation to make the product appealing to the end customer.

Environmental Aspects - Markets

Palm has emerged as a company providing the PDA (Personal Digital Assistance) to the consumers to keep their day-today activities electronically and also synchronize it with the PC. The market trend for PDA did not pick at the very beginning but slowly it became more popular with the business travelers and executives.

While shipments declined in 2003, personal digital assistants (PDAs) have continued their evolution into multimedia and business data devices, reports In-Stat/MDR (Scottsdale, AZ, www.instat.com). The high-tech market research firm finds that most companies in this industry are hoping for a rebound into positive growth, with manufacturers still focusing on growing the market by attracting new users and convincing current users to upgrade(EBSCOhost) .

PalmOne, which was created from the 2003 merger of Palm and its former nemesis Handspring, has found a way to successfully capitalize on the next big thing in consumer electronics: the smartphone. Thanks in large part to the popularity of its Treo 600, a combination phone/messaging device/Web browser, palmOne's revenues in the first quarter of fiscal 2005 surged 62% from a year earlier. The company reported a profit of 38Ñž a share, compared with a loss of 57Ñž a share in the same period last year. Wall Street pros who had doubted palmOne's ability to catch the smartphone wave have now been won over. According to Thomson First Call, at the beginning of 2004, analysts were predicting a loss of 3Ñž a share in fiscal 2005 (which ends next May). Now analysts are forecasting a profit of $1.76. "There has been a positive transformation from the slower-growth, lower-margin handheld business to the faster-growth, higher-margin smartphone business," says Christopher Versace, an analyst with Friedman Billings Ramsey.

Palmone has now come out with Treo 650 which has really taken the market space in the smartphone industry. It has also tied with Microsoft and its Windows mobile to provide a smartphone with Windows mobile version. Last week , it cam out with its Palm version with Treo 700p. Palmone has now realized that it needs to keep a firm hold on this trend of smartphones to keep its competitors at bay.

Environmental Aspects - Competition

Palmone (formerly, Palm Inc) had one major competitor , Handspring. In 2003 , Palm acquired Handspringa competitor that was started by some of Palm's founders in 1998.Though Palm or PalmOne-branded handhelds are still the most popular in the market, recent years of gadget history suggest that deeper-pocketed competitors can quickly make up lost ground by borrowing good product ideas and implementing them in their own lines of gadgets. PalmOne competitors such as Sony and Dell , larger players on opposite ends of the handheld market, over the years have moved aggressively to develop products with flashy new features or tempt new customers with low prices (Forbes, 2003). Since Palmone has launched the Treo line of products after acquiring Handspring, it has captured the market of smartphones. HP is also a contender for smartphones, but it has still not emerged as a threat to Palmone. Palmone has also tied up with the wireless companies to provide the service with the Treo at a lower price. This attracts customers to buy Palm-based smartphones. Many medical facilities and business executives do their day-today activities on their Treo. many warehouses and inventory check are also done on the smartphones and data sent on the Internet through the smartphone.

Environmental Aspects - Technology

Since Palmone being in the technology market itself, the technology has greatly helped in marketing the products for Palmone. Palmone relies heavily on the Internet for marketing of their products . Currently it does not have any stores of it own , but it sells it through the retailers and the smartphones through the service provider. Palmone has never used media and very rarely used the print option like magazines and paper to market its products. The customer has to learn about the products either on their site or when they visit the retail shop. I think this was a major drawback for Palmone marketing strategy. Many customers were/are not aware of the different products that Palmone offers unless they go the their site and are technology savvy to