Tom Tom Marketing Strategy

Topics: Global Positioning System, Marketing, Automotive navigation system Pages: 12 (3303 words) Published: April 14, 2012
1.Product & Market

For the purpose of this assignment I have selected navigation device GO 740 Live (Figure 1) produced by company TomTom, which has been released to market in 2009. It is a portable GPS solution for cars. A wireless modem within allows the TomTom GO 740 Live to connect with TomTom’s servers for access to weather or gas prices to localized Google Points Of Interest (POI) searches. It uses traffic information fed from other live Global Positioning Systems (GPS) devices, letting TomTom layer that information on top of conventional traffic feeds.

Figure 1: TomTom GO 740 Live
GPS, the US satellite global navigation system made available for civilian use in mid 80ies has commenced its commercial use by removing selective signal availability in 2000. In early 90ies there were already several pioneer companies (Garmin, TomTom) setting up new technology companies developing GPS receiver devices. Since then market has grown to estimated $8.2 billions worldwide in 2009 (Garmin) and is still considered as a market with great potential. Considering the aimed usage, target customers market can be divided into three major segments:


Focus of this work is the consumer segment which has been estimated to reach $5.1 billions in 2010 (Frost & Sullivan).

Consumer market segment of GPS handheld applications can be split into two major subsegments:

Navigation services, or mobile maps available for mobile phone users •Mobile GPS devices (dominated by vehicle navigation)

Amongst the larger market players are companies like TomTom, Garmin, MiTAC (Magellan), Verizon Wireless, TeleNav, Nokia. TomTom’s principal competitors are Garmin and MiTAC (Magellan).
Global financial crisis has also affected navigation solutions market which has declined roughly 18% - 19% y/y in 2009. Most of the large market players have reported their sales declining. Early 2010 results are indicating recovery.

Fast technology progress is driving the market players to not only answer the key customer question “what is the shortest way to… ?” but also to provide number of additional information and services which are enhancing the product and service. First to market technical improvements hold the key to success. In this highly competitive market where many products offer similar features, enhanced displays, software, battery power and functionality are some of the common differentiators. Innovation, accuracy, up-to date information and reliability are the main criteria searched for by customers.

TomTom has delivered $1.5bn revenue in 2009 in Europe ($1bn), North America ($0.4bn) and rest of the world ($0.1bn). Sale of goods is its strongest segment ($1.1bn) followed by $0.16bn of services and $0.18bn royalties.

Company strives to deliver constant innovation. Apart from releasing its new flagship TomTom GO 740 Live, it has refreshed the entire PND portfolio in 2009. Replacement purchases category is growing and showing high loyalty of customers. TomTom is number one in the European market of navigation solution consumer segment with 45% market share. In US they are number two with 24% market share. Overall company delivers high margins (49% in 2009) and solid operational margin (16% in 2009) which suggest that they are able to balance the revenue product mix and have the right focus on cost management.

2.Marketing Objectives

The main focus of TomTom is car navigation using its digital mapping and routing technology. Key objective is technology leadership with superior products & services in the area of portable navigation. Mission is to provide high quality data continuously updated by latest information through extensive fleet of surveying vehicles and large community of users. By better routing and unique real time traffic information service TomTom wants to provide cutting edge navigation solutions. Focus of the company is to remain leader in the area of...
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