Marketing Plan for Raspberry Pi
- Business name: Raspberry Pi Foundation.
- Business structure: Charity (No. 1129409).
- Business location: UK.
- Business owners: Eben Upton, Pete Lomas, Jack Lang, Robert Mullins, David Braben, and Alan Mycroft.
- Products/services: Microcomputers for children.
- Vision statement: “To make a difference to the way children interact with computers” (Upton).
- Objectives/activities: Promoting learning programming in schools, organizing competitions, providing free tutorials, cooperating with partners on the educational projects (Upton).
- Target market: Schools, families, and children.
- Marketing strategy: Massively reducing the cost of computing hardware” (Upton).
- Government grants.
- Guaranteed loans.
The Raspberry Pi Foundation is a UK registered charity (No. 1129409). The object of the charity is to continue the advancement of adults and children’s education, particularly in the field of computers, computer science, and related subjects. The charity was founded in November 2008 (Mullins).
The company is based “in an office at the computer laboratory in Cambridge University” (Upton). It has been operating on the market for more than a year.
A flexible low-cost computer Raspberry Pi was the first project of the company. It aims at providing an ideal environment for experimenting with programming and electronics. The computer has a credit-card sized footprint and consumes a few watts of power (Mullins).
Therefore, it can be easily transported or attached to a battery, which is important for experimenting with portable electronics and robotics. There are two models of the product: the Model-B went on sale on the 29th February, 2012 and the Model-A in February 2013 (Mullins). According to Jon Brodkin, by the 1st of March 2013, one million devices had been sold. The production started in Asia, at the moment computers are at Sony's UK Technology Center factory,
Raspberry Pi is in a trend of producing small single-board computers. Its main target market is schools and families with children going to school. Therefore, the product is positioned as an educational tool for the target group. At the same time, the company focused on creating a high-end, competitive and low-cost product. At the moment, there are a few competitors in the low-cost single-board computer’s niche. However, Raspberry Pi had a first-mover advantage on the market; moreover, the demand was higher than expected. Thus, it helped Raspberry Pi to spread quickly on the market and obtain a large number of customers.
As a charity foundation, the company does not have any financial profit as a goal. Raspberry Foundation seeks to achieve goals corresponding to its vision statement:
- Funds raising by building alliances with sponsors and enlisting the support of governmental organizations to help in the running and future educational projects.
- Reaching a great number of schools with Raspberry Pi.
- Cooperating with social organizations abroad to reach the schools outside the UK, including developing countries.
- Organizing projects and competitions to encourage children to learn programming on the Raspberry Pi’s platform.
- Supporting the community of enthusiastic Raspberry Pi owners who help to develop compatible open source software.
Target Market and Positioning
Schools and families with children are the target market of the company in accordance with the company’s objective. The company aims at encouraging children to learn programming. However, “the device has proved popular with hobbyists despite being conceived as a tool for teaching children to program” (Shead). Therefore, the company has schools and families as a primary target market and hobbyists as a secondary target market.
According to Eben Upton, the company differentiates itself “purely on the basis of cost”. The lowest cost on the market brings the company to unique selling position. A computer and the Internet are necessities in the modern society. The foundation aims at delivering fully functioning personal computers to the families and schools, and households are getting an opportunity to get an Internet access without purchasing expensive PC blocks.
Raspberry Pi is created for children to learn programming. Positioning product as an educational tool forms a certain image of the company in the minds of its customers. Education is valued in the modern society; therefore, people will choose Raspberry Pi to another similar product.
Positioning Raspberry Pi as an innovative product awakes an interest of a certain part of IT community, e.g. enthusiastic developers and experimentalists. At the moment, Raspberry Foundation has a large community of enthusiasts helping to develop compatible software for the product and experimenting with the device.
Business Situation Analysis (5C)
Being the first on the market and bringing an innovative idea have led to a higher demand than it was expected. The initial plan was to sell ten thousand items of the product; however, they were sold within hours after sales launch, and one hundred thousand items were ordered on the first day (Heath). The company had to deal with delivery delays and determine a purchasing quantity restriction - one item for one person. According to Liz Upton (SOURCE SHOULD BE), four thousand items were being made every day since July 2012; after having moved best part of manufacturing to the UK in September 2012, the initial contract with the Pencoed plant stated the production of thirty thousand items a month. This step provides better control on manufacturing, guarantees the better quality, and according to discussion forums in the Internet, finds positive responses among the customers. The present demand is still higher than the rates of production resulting in the longer delivery times.
The main objective of the company is to reach schools and children with the product to encourage and enable them to learn and apply computer programming. The compatibility with open source software and the low cost of the device makes the product affordable for schools and families. The product has brought additional attention of the hobbyist communities. Another objective of the foundation is to support them and encourag different DIY projects.
Raspberry Pi is a credit-card sized computer that plugs into a TV and a keyboard. It is a capable little PC which can be used for many of the things that a desktop PC does, like spreadsheets, word-processing, games, as well as playing high-definition video. At the moment, there are two models of the product in the line. (The Model A is a lighter version of the Model B (Figure 1). It lacks the Ethernet, as well as the second USB port and has only 256 Mb of RAM. It went on sale in February 2013 (Upton).
The main purpose of simplifying Model B was making an even more affordable computer. According to Liz Upton, the additional improvement was a power consumption decrease, “which is of key importance to run projects from a battery or solar power: robots, sensor platforms in remote locations, Wi-Fi repeaters attached to the local bus stop, etc.”
The product line has a space for improvement. Creating new models with a better performance and lower energy consumption broadens means for applying the product. However, an additional work on the software development has to be conducted. An advantage for the company is in having a big community of developers supporting the project by the further developing applicable open source software. Considering a high demand for the product company should work further on its increasing production capacity to avoid other competitors.
- Channel type
The Internet is the only distribution channel of the company. The distribution via the Internet simplifies the process and dispenses the company from additional costs, e.g. rent and salary of extra employees. Cooperation with big online electronic retailers provides customers an easy way to order the product from any place in the world.
Raspberry Foundation cooperates with three electronic distributors: RS Electronics, delivering worldwide; Premier Farnell, delivering in Europe; and Allied Electronics, delivering in the USA and Canada (Raspberrypi). The low price cannot provide distributors with a big margin by selling Raspberry Pi boards. The paramount interest is in selling associated high-margin accessories and peripherals, e.g. keyboard, cables, and adapters. Both sides are profiting: Raspberry Foundation by keeping the price low and distributors by extra selling opportunities.
Raspberry Foundation is supported by the University of Cambridge, headquarters of the foundation, Mythic Beasts and Webfusion, hosting and bandwitch providers, and Olswang, law and client relationship management company (Raspberrypi). The alliances mentioned are essential for the company. The University provides funding for the charity and field for further research and development of the project. As the Internet is the main platform for company’s activities in distribution, promotion and customer support, managing hosting is essential from the very beginning.
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Another category of alliances will help to realize the objective of the company. The company will be working with Google and six UK educational partners to find the kids who will benefit from having Raspberry Pi. CoderDojo, Code Club, Computing at Schools, Generating Genius, Teach First and OCR will be helping to work on promoting the teaching process of computing in schools; OCR will be creating fifteen thousand free teaching and learning packs to go with the Raspberry Pis (Upton). All the companies above, except Google, have multiple educational projects as their key objective. CoderDojo, Code Club, and Computing at Schools organize projects mainly in computing. Google is an important partner of Raspberry Pi to finance charity projects. The Raspberry Foundation aims at having long and productive cooperation with its partners in the field of free and open learning in schools.
- Market segments
Three market segments are to define: educational institutions, households, and hobbyists. It is of high interest to focus marketing strategy on the hobbyists segment as part of maintaining a further growth of the volunteers community, e.g. DIY (Do-It-Yourself).
- Motivation behind purchase
The charity status and the main objective of the foundation to teach children stimulate positive attitude among customers. There are certain types of people the values appeal to: volunteers, open source software developers, teachers, etc. Positioning the product as a tool for learning and experimenting awakes people’s interest. A low price provides additional motivation to purchase the product among those people whose values focus mainly on functionality.
- Consumers’ information sources
The Internet stands as the main source of information for consumers. Specifications, news, and other information can be found on the web-site of the product. It contains links to the multiple Internet resources devoted to concomitant projects and tutorials for the product.
Since May 2012, a magazine has been produced by an independent group of Raspberry Pi owners, not affiliated with the Raspberry Pi Foundation (TheMagPi). The MagPi is one of the examples of the by-products developed by the Raspberry Pi owners’ community on their own initiative. All issues of the magazine are available online for free and can be ordered in a print version. Supporting such projects, as well as further developing of the Internet resources must be present in the marketing strategy of the company.
- Quantity of purchase
By July 2012, the company had to restrict purchases of the Raspberry Pi to one per customer, because the demand has been too high comparing to the production capacity. Since July 2012, the production capacity has been increased, and thus, the demand can be satisfied (Upton). The individual orders tend to be expensive, due to delivery costs. Therefore, the company currently encourages resellers to buy bulks of Raspberry Pis when delivering abroad as it helps to lower transportation costs and deliver the product to customers with a relatively small rise of the price.
Raspberry Pi had a “first on the market” advantage as it went on sale. However, the innovation is followed by a trend of producing cheap single-board computers. At the moment, there are a few counterparts on the Market, e.g. Cubieboard, Hackberry, and Odroid-U2. According to the information on the products’ web-sites, all counterparts have better specifications than Raspberry Pi, e.g. processor, RAM, comparable size, and active developer communities. Offering products of a better performance for a fair price is the main strength of the competitors. However, Raspberry Pi has certain advantages: a unique selling position, social value of the project, and the lowest price on the market. In addition, the Raspberry Foundation has the largest developing community and multiple supporters, due to tolerance of the society to its objective. Therefore, it will remain as a leading company in the nearest future.
The charity foundation has support of the government and state educational institutions. There are specific regulations the company must follow while fulfilling by a certain type of activities, which the Raspberry Foundation has done successfully and intends to do in the future.
The main area of company’s marketing activities is the Internet. It is a global source, and its main specification is a free spread of information. Raspberry Pi is becoming popular, due to the flow of online articles, reviews, and projects.
The economic environment is not stable at the moment, due to the continuing world economic crisis. The low-cost position of Raspberry Pi in this case is an advantage.
The product appeared on the market in the favorable technological environment. Computers and education are a necessity in the modern world. Raspberry Pi satisfies the need in technology by offering an affordable substitution of classical PC and brings a social value by setting an objective of educating children, which is widely supported by the society.
Marketing Mix Strategy
The Raspberry Foundation is producing cheap single-board computers to encourage children to learn programming. It is the only product on the market with a mainly educational approach. The foundation has got large support of the open source development community, due to this social approach. The company went on the market with the right innovative product meeting the needs of schools in a low-cost tool to teach students programing.
The Raspberry Foundation went on the market with the lowest price existing on a computer, using the market penetration pricing strategy. With the appearance of competitors, it is time to increase production of a cheaper model. There are 2 models sold for $25 and $35. These models slightly differ in hardware specifications. It is a non-for-profit product; therefore, the price reflects the production and shipping costs for the computer board. Using competitive pricing strategy and offering even lower price for certain functionality of the product (model for $25) will ensure a stable position on the market.
E-commerce is the most convenient way to make Raspberry Pi available for the customers. Operating in the web and cooperating with leading e-commerce electronic resellers does not need big investments and provides independence from the place of production. The Raspberry Foundation produces devices in the UK and has alliances with global electronic distributors. This strategy provides the possibility to keep the price on the lowest level and deliver the product to customers worldwide.
It is difficult to organize a promotion for a charity organization, due to the uncertainty with fund raising, finding sponsors, as well as selling non-for-profit product. Since the Internet provides large opportunities for promotion, the company has focused web-site optimization for search engines, forums, reviews, online magazines on certain themes, etc. From the beginning, the founders of the company focused on using those instruments to make their idea well-known to the public. Currently, Raspberry has a large supporting community of software developers and multiple projects going on without any efforts of the foundation. The implementation of the Word of Mouth (WOM) strategy has allowed the company to build brand awareness of its product and attracted multiple supporters and customers. The company only has to continue its activities, which should be be covered in the multiple global sources and forums. Building the brand and community online is a key promotion of the company.