April's+Page


 * Technological Innovations**
 * Garmin’s customers seek them out as the market leader for innovation, quality, reliability and support. This gives Garmin a strong, enthusiastic following in each of their market segments.

Garmin pioneered the standalone portable navigation device market. GPS technology moved onto cell phones a few years ago and is a fast-growing feature on the devices. Some 77 million GPS-equipped smart phones will ship worldwide in 2009, up 35% from last year. (Garmin, 2008)

The market for stand-alone GPS devices is fast-growing and increasingly competitive as multi-capability devices, such as smartphones, are gaining market share.

The United States Department of Defense controls the satellite system that enables GPS technology, and Garmin licenses maps from NAVTEQ, which is owned by Nokia NOK. (Becky, 2009) Garmin delivers value by combining these technologies to a user-friendly consumer package. Garmin relies on a combination of patent, copyright, trademark and trade secret laws, as well as confidentiality agreements, to establish and protect its rights. Garmin hold rights to a number of patents and registered trademarks and regularly file applications. Garmin maintains a strong commitment to R&D.

One of the key strategic initiatives of the company for its future growth is continuous innovation, development, and introduction of new products. Garmin benefits greatly from the consistently expanding aviation, marine and fitness segments. Product development for these segments accounts for nearly 30% of Garmin's sales and approximately 45% of its operational earnings. (Kiley, 2009) **

Garmin leverages its GPS expertise to deliver navigation devices for anything that moves. As the navigation component of its devices becomes more commoditized, Garmin is branching out into services and new devices such as the nüvifone to sustain its market share. Garmin also distinguishes itself from competitors through rapid research-and-development (R&D) cycles that deliver product refreshes quickly.
 * Marketing strategy**

Garmin's primary marketing strategy is to "provide a quality product at an affordable price." The overarching mission of this strategy is: “to enrich the lives of customers, suppliers, distributors, associates and stockholders by designing, manufacturing and selling navigation and communication products that provide superior quality, safety and operational features, lower cost of manufacturing and ownership, and sufficient profits to support desired company growth.” (Garmin, 2007)

//Product// Garmin designs, manufactures, markets and sells over 100 products worldwide for consumer, business and military applications. As customer demands have evolved - Garmin has launched new products. Their communication and navigation products serve the aviation, marine, outdoor, fitness, automotive, mobile and OEM markets.

Most recently, Garmin announced the release of the nüvifone product line. With the nüvifone, Garmin will be competing with mobile phone manufacturers. The company’s value proposition is to integrate navigation into the mobile phone, making it a prominent feature rather than an after-thought. There is a concern among analysts that the nüvifone could cannibalize Garmin’s existing product lines.
 * Garmin's focus on R&D ensures the latest features are brought to market quickly through product refreshes.
 * Garmin is betting on the nüvifone to help it stay relevant as GPS functionality becomes pervasive on cell phones. With no history of success in phones, Garmin faces significant execution risk in a competitive industry.
 * Adoption of GPS service by wireless carriers could cannibalize sales of Garmin's personal navigation devices.

//Price// Overall, pricing for GPS products dropped by 15% year-over-year in February 2007 compared to the same period last year. The average price of GPS products as of 2007 was $433. With the onset of lower priced products introduced by Mio and viaMichelin, we expect to see increased pricing competition between manufacturers. This will lead to further downward trending in pricing for GPS products, as more manufacturers realize the benefits of targeting mainstream consumers at low-end price points.

Of the most popular GPS products, seven out of the top ten are produced by Garmin. TomTom and Mio, both known for offering several affordable GPS products for the mainstream consumer, also made it on the top ten lists. Being the main manufacturer on this list, Garmin’s GPS products had an average price of $467. Non-Garmin GPS products on the list had an average price of $307, priced 34% lower than Garmin GPS products. (Pricegrabber, 2008) Garmin ranks highest in a list of average price ranges for all GPS products by manufacturer:
 * $500 average price range - Garmin
 * $400 average price range - TomTom, Magellan, and Lowrance
 * $200 average price range - Mio and ViaMichelin

Garmin pricing strategy matches the overall impression of the GPS market which is still considered a niche market. Although Garmin reaches the high-end consumer, offering GPS products in the average price range of $500, 70% of the most popular GPS products listed are Garmin products.

(Pricegrabber, 2008)
 * With increased competition, Garmin is lowering prices -- adversely affecting their market share.
 * Though priced competitively, weak consumer spending has slowed Garmin's sales growth recently.
 * Average sale prices for Garmin's navigation devices continue to fall as competition increases.
 * Garmin recently benefited from lower input costs

Garmin products are available in a variety of retail channels on three continents: North America, Europe and Asia. As consumer demand for GPS technology increases, especially in the automotive market, Garmin has opportunities to meet the needs of consumers in more key markets with new and refreshed innovative products. In addition to a more traditional distribution system, Garmin also has relationships with the original equipment manufacturers. The consumer product distributors of the company include automotive OEMs such as Chrysler/Mopar, Toyota, Harley-Davidson, BMW Motorrad, and Honda Motorcycle.
 * // Place //**
 * Garmin has developed a strong distribution network that includes over 3,000 independent dealers, including many of the largest electronics retailers around the globe.


 * Garmin's consumer products are marketed through local distributors who resell to dealers.


 * Garmin's distribution reach is diminished as retailers such as Circuit City close stores.

//Promotion// Garmin utilizes an in-house advertising agency that handles all of the company's promotional and communication needs. Included in this department are artists, writers, designers, media buyers, event coordinators, video producers and public relations specialists.

Throughout 2008, Garmin’s strategy included a relationship as the exclusive navigation supplier to Kenwood’s new 2008 lineup of in-dash automotive electronics. With this agreement, Garmin aligned with Kenwood on print, radio and online advertising in addition to a dedicated internet site and point-of-purchase materials to inform customers. (Garmin, 2007) Late 2008, Garmin announced a decision to shift its focus to the specialty retailer channel. The decision is attributed to the company's goal to win back independent bike dealers. Previously, Garmin's cycling-specific products could be found in three different channels with the same pricing. According to Stan Brajer, director of fitness sales and marketing for Garmin, they wanted to focus on the specialty market. (Norman, 2009)


 * The company's focus on marketing its brand and products focuses on increased consumer awareness of the Garmin name.
 * Efforts include typical media placements (periodical ad space, billboard, radio)


 * Cited Sources:**
 * Becky H. GPS brownout unlikely. //Colorado Springs Business Journal (CO)//. n.d.;Available from: Regional Business News, Ipswich, MA. Accessed September 25, 2009.
 * Bertolucci J. Let a GPS Be Your Trail Guide. //Kiplinger's Personal Finance//. August 2009;63(8):p70.
 * Event Brief of Q2 2009 Garmin Ltd. Earnings Conference Call - Final. //Fair Disclosure Wire (Quarterly Earnings Reports)//.
 * Garmin Signals The Worst Is Past. Wall Street Journal - Eastern Edition, August 6, 2009:pB5.
 * Kiley D. THE RIGHT DIRECTION. //BusinessWeek//. September 28, 2009;(4148):p75.
 * Mott G. Golf & GPS Technology. //Cigar Aficionado//. September 2009;17(6):pp81-85. Available from: Business Source Premier, Ipswich, MA. Accessed October 1, 2009.
 * Norman J. Garmin Changes Strategy to Focus on Specialty Bike Channel. //Bicycle Retailer & Industry News//. April 15, 2009;18(6):p10.

· http://electronics.pricegrabber.com/gps · http://finance.yahoo.com/q?s=GRMN · http://www.garmin.com · http://www10.giscafe.com/nbc/articles/view_article.php?articleid=493609 · http://www.gpslodge.com · http://www.mobilewhack.com/garmin-and-tomtom-sold-over-10-million-pnds-in-2007/ · http://www.tomtom.com
 * Other Sources:**