1 in their diverse sports activities (successstory.com, 2017).
Introduction to GoPro Inc.
GoPro, Inc. (GoPro), incorporated in 2002, produces cameras and
mountable and wearable accessories (Schmidt & Thompson, 2014, p. 3). Its merchandise
include Cameras, drone and image stabilization, virtual reality, mounts and
accessories, software applications and services. GoPro cameras are capable of
capture and record in high quality through a wide angle lens and they can be
configured to feature in an automatic way with a minimum intervention, or to be
controlled in remote mode (successstory.com, 2017). GoPro become the
early market leader in portable cameras and had cornered the market via
extraordinary hardware and delightful designs. The cameras were durable, may be
used in all kinds of environmental conditions, and taken the action sports
marketplace to lifestyles.
The cameras were used to movie the death-defying feats of action
sport athletes, who began to self-produce small clips that showed them catching
waves, base jumping, and “going pro” in their diverse sports activities (successstory.com, 2017). The corporation has
constructed its personal network, having loyal fans, and creating products that
give sportsmen the ability to share their talents like in no way before. The
company created cameras that have been a staple amongst modern athletes and worn
by using the most famous athletes in action sports (Galleso,
2016, pp. 20-25).
It uses a group of location-based sales representatives to
promote its products in the United States of America concentrated on sports activities
and consumer activity markets. GoPro products are bought globally via shops,
wholesale distributors and on the company web site (Galleso,
2016, pp. 20-25).
GoPro – Differentiation Strategy as a Leader in
Consumer Electronics Market
What is differentiation strategy?
Based on Porter’s five competitive forces, there are three
potentially successful generic strategic approaches to outperforming other
firms in an industry,
overall cost leadership strategy
The second strategy, differentiation strategy is one of
differentiating the product or service offering of the firm, creating something
that is perceived industrywide as being unique. Approaches to differentiating
can take many forms such as design or brand image, technology, features,
customer service, dealer network or other dimensions. Ideally the firm
differentiates itself along several dimensions (Porter, 2008,
Key strengths in differentiation strategy
Firms which rely on a differentiation strategy usually have these
strengths (Paley, 1999, pp. 87-88).
Performing leading scientific research
Highly skilled and creative product development
Strong sales team or network with excellent
Corporate reputation for innovation and quality
GoPro follows its own differentiation
strategy, highlighting the key strengths mentioned above. These key strengths
has been successfully influenced to the competitive advantage of the company.
Scientific research in GoPro
To gradually differentiate the products, the scientific research
is essential. GoPro is a leading scientific researcher in consuming electronics
industry. GoPro follows a different aspect in R investments. They are
heavily invest in research and development compared to other consumer
electronics manufacturers. The following statistics reveals the R
expenditures by GoPro from 2012 to 2016 (Portal, 2017).
Figure 2: GoPro’s
research and development (R&D) expenditure worldwide from 2012 to 2016 (in
thousand U.S. dollars)
Compared to the big player ‘Apple’, GoPro has invested
approximately five times than Apple in research and development.
Figure 3: GoPro
R&D investment in 2014 (in thousands of dollars)
Figure 4: Apple R&D
investment in 2014 (in thousands of dollars)
As a result of these investments more than 490 patents has been
owned by GoPro including both software and hardware related patents (FreshPatents,
Product development team in GoPro
GoPro processes a young skilled and creative team of around 110
experts (medium.com, 2016). Their approach is
rather different from a conventional design team as they have no resources at
the startup and they built their own algorithms, software, hardware and
services. The design team works closely with entertainment and marketing groups
to achieve their innovative ideas.
GoPro’s creative team has certain qualities such as never
stopping redesigning, making it multitasker and prioritizing convenience and
shareability. As examples now they have developed the camera with the
capability to capture videos and photos simultaneously, can shoot photos both
in air and underwater with different types of mountings and even cameras are
built with photo sharing ability with no special software needed based on Wi-Fi
technology (Winfrey, 2014). These different
approaches of the product development are specific areas in their
Sales team in GoPro
GoPro has a large worldwide sales team with compared to action
camera competitors like Xiaomi, Sony, JVS and etc. The company provides
external training seminars for every retail associates evaluating them
separately. They provide necessary marketing and technological knowledge to
associates to deal with customers confidently. And every retail associate must
use GoPro training app on their personal devices on the retail floor. This is
somewhat lifestyle focused digital training solution. This differentiation has
been lead the company into a remarkable position. Because of this skilled sales
team, GoPro’s revenue has been increased rapidly which is pointed out by
Figure 5: GoPro’s
revenue since 2010 (businessinsider, 2016)
Reputation for quality and innovation towards
GoPro produces quality action cameras with innovative features.
The customer feedback for quality and innovation is quite high for GoPro. That
is 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 HERO
black has been scored 4/5 stars in Amazon
In every minute at least one video is uploaded to YouTube, thus
the brand is automatically marketed by the consumers (Winfrey,
This reveals the trust, reliability of the cameras among consumers in one angle
and on the other angle different marketing strategy followed by GoPro.
GoPro – Marketing Mix
What is marketing mix?
According to Philip Kotler whom considered as father of modern
marketing “Marketing Mix is the set of controllable variables that the firm can
use to influence the buyer’s response” (Aziz, 2017, p. 88). To market products
or service, using a mix of techniques and tools is essential to get the best
effect, depending on the products or services and the customers targeted.
The 4Ps of marketing mix are as follows,
Figure 7: The
marketing mix (Baker, 2003, p. 287)
The products are not only the things that customers are looking
for, but also the services and intangibles that surround it. As the customers are
looking for choices, the manufacturers have to offer consists of a range, a
selection of choices, products that complement each other and make it
attractive for the customers to come and buy (O’Kane, 2011).
GoPro introduce a product mix with every innovative product that
they are offering. GoPro has their own accessories such as smart remotes, LCD
touch backpack, battery backpack and applications and software. Packaging of
GoPro is simple but effective, therefore it consumes less time to pack or
unpack the camera and its accessories. Customers are willing to pay these type
of product mix rather than buying a traditional video camera. This product mix
concept has been worked fabulously for them. GoPro is a distinctive brand name
than the other brand names and also its name ‘go pro’ gives a feeling to the
customers that this brand is superior to others. “GoPro Be a HERO” this brand theme of GoPro
which motivates customers and easily goes into customers mind. It tells
consumer to go and do something new and be a hero. It is perfectly match with
company’s image of adventure. Therefore it can be concluded that product mix
adopted of GoPro highly contributes to its branding establishment.
When an organization decides a price for their products or
services they should take the required profit margins and the probable pricing
response of competitors into account. The organizations have to deviate from
established prices by means of special offers, discounts, and reductions in
rates to gain competitive advantage.
Price of GoPro cameras depend on their features and quality. The
cheapest GoPro camera is Hero 3 White Edition which was priced £199.99 and the
most expensive GoPro camera is the Hero 6 Black Edition at £399.99 during introduction
stage. GoPro has had the advantage of profiting from premium pricing previously.
But when cheaper alternatives as Xiaomi enter to the market gradually the price
is being decreased by the company focusing towards a penetrating pricing
strategy. But they still have the first mover advantage. To increase sales they
offer free shipping during Christmas holidays. By the way GoPro follows
different price mixing techniques to be in the game establishing its brand.
The location where the business will be established is meant by
place. In most cases, customers will never come to the place of business to buy
a product. That is where channels of distribution must be properly identified
for the products and services.
GoPro products can buy online though company website or other
online retails websites such as Amazon. This method is attractive as within one
call or a mail customers can pick up their orders within 24 hours. GoPro use
specialty camera, sport and electronics retailers to distribute their products
other than their own retails. Distributing products by major retailers and
specialty retailers is a good way to sell product because customers have
positive attitude on them including GoPro products as well. These types of
place mixes support the brand to stabilize in the competitive market.
This is the stage when company puts its entire effort on
marketing. Marketing never starts or ends with only advertising, it is only a
part of promotion activities. Other promotion activities include direct
selling, public relations, internet, social media, sponsorship and personal
To promote GoPro cameras the company utilizes different contest through
their website. Anyone who has GoPro camera can enter into this contest by
adding videos or photos to the video or photo of the day contests. GoPro uses
paid online videos ads in video hubs such as YouTube, Dailymotion and etc. to
targeted audience. Partnerships and sponsorships are the major promotion
activities done by GoPro. GoPro has partnered with Red Bull to increase
publicity and they gain media attention through events sponsored by them mostly
athletic events. They sponsor the most famous sport football and allow the
payers to mount GoPro cameras on their heads in National Football League. Therefore
the audience, viewers can watch the sport in various angles feeling the actual
live competitiveness of the game. This will change the mind of such football
fellows to buy such cameras. By all these promotion mixing methods GoPro
establish its brand worldwide.
Global Distribution Challenges in Penetrating
Asian market is a challenging place to do businesses. GoPro will
have to face wide range of global distribution challenges in penetrating Asian
markets within five regions of Asia.
Unlike Europe, Oceania and America, the cultural, geographical
differences 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 when
expanding their businesses in Asia. But GoPro will like to business in Asia due
to rapidly changing demographics, increased consumer spending, rising incomes
and open business environment. GoPro need to understand that Asian consumers
have very different needs than consumers in their home markets. Insufficient
knowledge of geographical and cultural differences in Asian market could act as
a barrier for entering Asian market for GoPro. In Asia most of the people are
middle class people those who cannot spend for consumer electronics fully
potentially, but healthily. Therefore GoPro cannot catch the market with high
prices, they have to lower the profit margin. This is one of critical global
distribution challenge that GoPro may have to find solutions.
There are plenty of alternatives in Asian market instead of GoPro
action cameras mainly in East Asia and South East Asia. There are plenty of
GoPro 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 Asia
introduced an action camera with same features with 1/3 lower price. Thus if
GoPro enters to Asian market, they have to compete with these alternatives.
IPR infringement is common issue in
Asia. This is one of biggest challenge that GoPro will face in global
distribution of action cameras in Asia.
One of other challenge in global distribution in Asian market for
action cameras is that custom taxes and logistics issues. Customs and
regulatory requirements for different countries are different in Asia. Import duties and taxes related to foreign
trade and business is high in many Asian countries to encourage local industries.
Logistic issues in customs mainly arise in South Asian countries such as low
processing speeds, delays in custom clearance, ambiguities in product
classification, numerous internal check posts, city entrances, and other
Government policies and regulatory requirements are different for
different countries. And another fact is that the government policies are
frequently changed in Asian countries. This will badly effect on consumer
electronics manufacturer like GoPro because this might be end up in losses.
To catch the Asian market, qualified sales representatives and
other executive staff must be hired. It is difficult to recruit qualified staff
members as a foreign company in an unknown region. Because those hired members
must possess the language skills and critical strategic thinking as required.
This will directly affect the product distribution in those Asian countries
because the quality of the staff will end up in increase in sales.
Recommendations for overcoming future challenges
from the cheaper alternative brands entering the market.
New cheaper alternative brands of action cameras enter to the
action camera space combined with older rivals in present. GoPro competes with
globally recognized brands such as Canon, Nikon, Sony, Panasonic, Polaroid and
Xiaomi today. These companies introduce cheaper alternatives with excellent
features for customers. Therefore under this competitive pressure if GoPro is
not differentiated, the company cannot survive in the market. For overcoming
future challenges GoPro can follow different strategies.
One such strategy is to use dual distribution strategy where a
business supplies its products or services both directly and indirectly to the
consumers. This is very simple strategy, the producer sells the products directly
to 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 distribution
of its products. This strategy will ensure the brand is common in the market
with easy access to the customers to purchase them, challenging the cheaper
alternatives in the market.
Consumers reach cheap alternatives due to the user friendliness
of the software features on the action cameras. According to the customer
reviews for its video editing software including android software, the user
friendliness should be improved. For that GoPro has to invest heavily on
software innovations. If company introduces facilities to edit raw videos
captured by the devices itself, quickly trimming facilities and online
screaming facilities; it is obvious that customers may attract to the products
than the cheaper alternatives.
If prices cannot be lowered, focusing on the ways of ahead over
the cheap brands in terms of quality and customer loyalty is a good strategy
which can be followed. It is true that consumers care about price but more on
quality of the products that they are paying for. The producers must justify
the value that consumers are willing to pay. In most cases customers are
willing to pay higher prices not just for a product but for a better customer
service. Most players have lost the customer base because their rivals have a
better customer services. Thus GoPro must concern about this fact when
competing with other brands.
In other way if prices cannot be lowered to complete with cheap
alternatives, then GoPro can separate themselves as the premium offer in the
market. Thus GoPro needs to invest in branding and customer service to make it
stick. This may end up in high end customers but higher margin of profit than
Mobile and visual storytelling are the clear megatrends in
consumer electronics presently. GoPro serves as storytelling solution but it
must be mobile centered. To do that GoPro has to introduce or extend the memory
capacity, battery life, display screen, image stabilization, upload and watch
instantly, accessories such as wide angle lenses and etc. GoPro has to find a
way to address a different market rather than of action sports to overcome
difficulties from the cheaper alternatives.
Over 25 million of GoPro cameras has
been sold in the world. To avoid GoPro existing customers go for cheap
alternatives, GoPro have to educate and excite them about the simplicity of
their new hardware and software. As an initial step GoPro can announce Trade up
initiative, offering discounts to them. They have to directly contact them to
demonstrate the mobile app experience to make them feel that usage of GoPro is
an extension of smartphone.
Joint venturing is another strategy
than can be adopted to be competitive with cheaper alternatives. When GoPro
deals in global market, it can make such partnerships to be a common brand in
local markets in different countries. By doing so GoPro can cut down operating
cost, get local sales teams, reduce import taxes which leads to lower their
Intellectual property rights infringement is common in Asian
markets. When a new technology is introduced this will happen automatically and
then cheaper alternatives come to the market. By protecting intellectual
property rights, it is harder to cheaper products to enter the market with the
same features. This will give GoPro a competitive advantage as they are good at
in R&D. legal and practical measures are available for protect their IPR.
This will be a good tactic for competing with cheaper alternatives.
GoPro camera is one of the best action camera in these days. Though
there are several different rivals that are thought of as potential
competitors, the GoPro remains as the leader. Even though it is an electronic
device that will have an effect on people’s social life, threatens their
privacy, it has got lots of advantages. In near future GoPro has to face a very
competitive environment due to smart phones and alternative cheap cameras. They
must evaluate their weaknesses and opportunities to be survived in the consumer
electronics market. Finally, it seems that the GoPro remains receptive all new
technologies, and adapts its products to them. This might be one of the reason
for its’ great success in the market.
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