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Garmin GPS Navigation Systems with New Integrated Technology

Marketing Management

Garmin GPS Navigation Systems with New Integrated Technology
1. Executive Summary Garmin specializes in satellite navigation systems, which are called Global Positioning Systems or GPS. Its core competencies have enabled it to become the leading competitor in the Portable Navigation Device (PND) market. Garmin is the leading portable navigation company in the industry with more than 50 percent of the market share in 2008. Through analysis and market research it has been determined that the industry has a high threat of competition especially due to the growing use of cellular device GPS products. When looking at Garmin’s life cycle, it has been determined that Garmin is currently in a declining state. Garmin’s stock, sales, and revenue have fallen since 2008. The most important environmental change that Garmin needs to focus on is technology change. Garmin’s products and its core business come from its research and development efforts. Garmin needs to recognize and adapt to the technology changes and consumer needs. Investing more money into research and development for PND devices will provide Garmin with greater potential to make a lasting impact on the industry. Garmin has the resource to compete with cellular handset devices and other PND companies. Garmin will release its latest automotive GPS device this January 2014. The new model will be superior to all other products in its line. This GPS system will have enhanced navigation with multiple-point routing, easy touch functions, 3D graphical mapping, new real time traffic updates with detour routing, and a new built in video for recording internal and external of the automobile. This will be an exceptional device to the GPS market and by far one of the most intelligent Garmin GPS devices in the market. It will be offered at a competitive price with current GPS devices even though nothing in the current market will have its same capabilities.
2. Situation Analysis Garmin is a global provider of navigation, communication and information devices, most of which are enabled by Global Positioning System (GPS) technology. Garmin was formed in Taiwan in 1990 and in 1997 they introduced their first automotive product, GPS (Global Positioning System) III. In 1998 they introduced an auto navigation product, Street Pilot. In 2000 the company went public, and Garmin Ltd is formed ("Funding Universe," 2004). Garmin’s growth and revenue has declined in recent years due to competition and the increase in mobile phones technology and applications. Garmin’s revenue quarterly YOY growth is 0.81% as can be seen on the chart below. 50%


0.81% -25% -50%

2009 2010 2011 2012
Figure 1. Garmin Revenue Quarterly YoY Growth Chart (

GPS is now a more mature market with multiple competitors, so it is now more important than ever to keep incorporating new and better technology into the Garmin GPS. Garmin uses GPS technology to wirelessly deliver geographic location data through satellite communication. It accomplishes this through its electronic maps and navigational charts in its portable products. Garmin has also entered into the market of making communication devices which combine both cellular and GPS technology. Garmin needs to incorporate new technology into their mobile GPS products. This technology should include real life traffic updates which are already being used by mobile phone devices. They should also look to stay a step above their competition by developing a real life video recording. Incorporate small video cameras into their existing mobile product that automatically upload video from the front of the vehicle to the back of the vehicle. To gain market shares in this technology, Garmin could target the population focusing on parents, insurance companies, and logistic companies.
1. Market Summary Garmin’s market consists of consumers and business users who prefer to use a single device for all navigational purposes. Specific segments being targeted are automotive, marine, hiking and aviation. GPS units that consumers purchase can vary depending on their need, applications offered on each unit and price per application need. Garmin now offers lifetime updates of their mapping navigation system. Garmin is forming alliances with cellular companies and providing them with GPS mapping service.
2. SWOT Analysis 1. Strength 1. The company owns its own manufacturing facilities in Taiwan. 2. Keep operating cost low with cheaper labor. 3. Garmin has great quality because all manufacturing is done in house. 4. Garmin is ISO certified and approved for use in the aviation industry which has tougher aviation laws control by FAA. 5. With research and development being done in house, Garmin has the ability to develop and use new technology and incorporate this technology into their products to support the usefulness of the product and the rapid growth of the product. 6. Garmin provides excellent customer service in areas like map upgrades, technical support, repairs, returns, and warranties. 2. Weakness 1. Low sale during the first part of the year due to customers not traveling or going on vacations until the later part of the year. 2. Lower cost of Garmin GPS brought on by economic decrease and an increase in competition. 3. Products become quickly outdated. 4. Garmin needs new innovation just to maintain market shares. 3. Opportunity 1. Garmin has great brand awareness throughout the world. The brand is well known in the GPS marketing and they sponsor different sporting teams and events. 2. All age groups are starting to use GPS and with research and development being done in house they have the opportunity to provide new technology and applications to their GPS units. 3. Form alliances with cell phone and other mobile device companies to incorporate Garmin GPS technology into these growing markets. 4. Increase demand for GPS navigation devices in the automotive industry. 4. Threat 1. Mobile devices are rapidly becoming mini computers which are capable of many different tasks which Garmin is only a single task device. 2. Mobile devices are incorporating GPS technology into their devices. 3. Competitors have equal access to available technology. 4. Increase competition from brand names like TomTom, Magellan, Mio, and a handful of others trying to compete in the GPS market. 5. Economic downturn has customers decreasing the amount of money they are or will spend on leisure products.
3. Competition Smartphones are taking its tool on auto navigation devices called GPS (Global Positioning Devices). The main reason this is happening is because Google and Nokia have both decided to give the technology away for free to the smartphone industry. Google introduced Android in October 2008, an operating system for mobile devices that incorporated its Google Maps and its navigation programs to cellphones. Nokia then began giving its own navigation software, Ovi Maps, to its smartphone users. To combat this problem Garmin, TomTom, and Mitac started selling its navigation software and applications to iPhone and BlackBerry companies. These stand-alone GPS devices also started to create specialized software to include speech recognition, 3-D street displays, and real time traffic reports. Smartphones are currently not able to compete with this new software (O’Brien, 2010). Garmin also has many competitors in their main targeted market which is standalone devices. Garmin’s top competitors are Magellan and TomTom. These products offer the same features as one another making the consumer uncertain on which GPS device to purchase. Garmin may hold the lead in sales, but with the features so close that consumers are purchasing based on better offers. And this is the primary obstacle that these GPS devices are facing now (Lendino, 2012).
4. Product (Service) Offering Garmin currently offers products in the automotive, marine, aviation, and outdoor/fitness markets (Garmin, 2012). Garmin has for the last few years offered high quality products, easy to read icons, colorful 3-D maps and free lifetime updates. They also offer regular firmware updates for Garmin GPS receivers as well as the Map source operating system are freely available from the Garmin website (The GPS Specialist, 2013, p. 1). Garmin provides excellent customer service in many areas like map upgrades, technical support, repairs, returns, and warranties.
5. Keys to Success • Have less version of your product. Create and provide only one low, middle, and high end version and market them accurately. • Upgrade navigation • Develop and incorporate real time traffic tools to compete with cellular/other mobile devices. • Add new product feature like installing real life video cameras to view, record, and upload video. This feature would record all driving so it can help in determining faults at accidents.
6. Critical Issues There are dozens of GPS devices with near-identical names and technology features. Stores are reducing prices on older version modules and keeping them stocked even as new versions with better features are available. That throws the entire notion of which devices are considered budget, midrange, or high-end into disarray, and makes it difficult for consumers to figure out which PND to buy (Lendino, 2011).
3. Marketing Strategy Garmin marketing strategy is: To enrich the lives of customers, suppliers, distributers, employees and stockholders by designing, manufacturing and selling navigation and communication products that provide superior quality, safety and operational feature, lower cost of manufacturing and ownership, and sufficient profits to support desired company growth (Garmin, 2009, p. 2) Garmin has employed and created an in-house IMC agency structure. This department has the agency and clients under one roof. This helps Garmin create a great deal of momentum in building the same brand as everybody is pulling in the same direction. This agency includes an art director, copywriter, print production, traffic, media, and PR and account services. This agency also includes a video staff that handles productions. This video staff creates everything from You Tube clips to a full-blown national television production. Garmin in-house team handles all forms of media and communication within their MarComm group (Garmin, 2012).
1. Mission Garmin’s mission is to be the leader and provide the customer with the ease of navigation through GPS units that have easy to use menus and intuitive features. Garmin strives to be an enduring company by creating superior products for automotive, aviation, outdoor, and sports that are an essential part of our customers’ lives (Garmin, 2012). Garmin turns complicated technology into useful products that will enhance people’s lives. To accomplish this Garmin designs, builds, and dreams of products through the eyes of the customer who need this technology in a simple easy to use product.
2. Marketing Objectives Garmin needs to develop and implement new product services into the market to gain a better market share. Garmin can incorporate real time traffic updates and video monitoring into its GPS equipment. Providing these services will maintain current sales and increase sales per quarter in different targeted markets. Some of these targeted markets could include personal automotive, fleet services “trucks and buses”, and insurance companies. Garmin already has a versatile and cost-efficient fleet monitoring GPS devices and incorporating these new services can optimize fleet resources and achieve lower cost and higher profits. Garmin must maintain positive, strong growth each quarter. They need to achieve a steady increase in marketing penetration in new target segments. Garmin needs to join forces with other companies that have already developed these new services “real time tracking, in car video systems” and incorporate these into their product within the next year. After these new systems are part of Garmin’s products they can then approach the insurance companies on giving insurance discounts for companies and individuals that purchase these products with these features.
3. Financial Objectives
Taking a look at Garmin’s financial statement for the last few years and we can see that Garmin’s revenues and gross profit have been declining.
Table 1
Financial Statement for Garmin Ltd (GRMN)

|Currency in |As of: |Dec 27 |Dec 26 |Dec 25 |Dec 31 |
|Millions of US Dollars | |2008 |2009 |2010 |2011 |
| | |Restated |Restated | | |
|TOTAL REVENUES |3,494.1 |2,946.4 |2,689.9 |2,758.6 |[pic][pic]|
| | | | | |[pic][pic]|
|Cost of Goods Sold |1,940.6 |1,502.3 |1,343.5 |1,420.0 |[pic][pic]|
| | | | | |[pic][pic]|
|GROSS PROFIT |1,553.5 |1,444.1 |1,346.4 |1,338.6 |[pic][pic]|
| | | | | |[pic][pic]|
|Selling General & Admin Expenses, Total |485.4 |419.7 |432.4 |486.2 |[pic][pic]|
| | | | | |[pic][pic]|
|R&D Expenses |206.1 |238.4 |277.3 |298.6 |[pic][pic]|
| | | | | |[pic][pic]|
|OTHER OPERATING EXPENSES, TOTAL |691.5 |658.1 |709.7 |784.8 |[pic][pic]|
| | | | | |[pic][pic]|
|OPERATING INCOME |862.0 |786.0 |636.7 |553.8 |[pic][pic]|
| | | | | |[pic][pic]|
|Interest Expense |-0.6 |-- |-1.2 |-- |[pic][pic]|
| | | | | |[pic][pic]|
|Interest and Investment Income |35.5 |23.5 |25.0 |32.8 |[pic][pic]|
| | | | | |[pic][pic]|
|Other Non-Operating Expenses, Total |-33.5 |-3.6 |-80.8 |-6.7 |[pic][pic]|
| | | | | |[pic][pic]|
|Other Non-Operating Income (Expenses) |1.8 |2.4 |7.6 |5.4 |[pic][pic]|
| | | | | |[pic][pic]|
|Gain (Loss) on Sale of Investments |50.9 |2.7 |-2.4 |4.3 |[pic][pic]|
| | | | | |[pic][pic]|
| | | | | |[pic][pic]|
| | | | | |[pic] |
|EBT, INCLUDING UNUSUAL ITEMS |914.4 |808.7 |577.3 |584.2 |[pic][pic]|
| | | | | |[pic][pic]|
|Income Tax Expense |181.5 |104.7 |-7.3 |63.3 |[pic][pic]|
| | | | | |[pic][pic]|
| | | | | |[pic][pic]|
| | | | | |[pic] |
|Earnings from Continuing Operations |732.8 |704.0 |584.6 |520.9 |[pic][pic]|
| | | | | |[pic][pic]|
|NET INCOME |732.8 |704.0 |584.6 |520.9 |[pic][pic]|
| | | | | |[pic][pic]|
|NET INCOME TO COMMON INCLUDING EXTRA ITEMS |732.8 |704.0 |584.6 |520.9 |[pic][pic]|
| | | | | |[pic][pic]|
|NET INCOME TO COMMON EXCLUDING EXTRA ITEMS |732.8 |704.0 |584.6 |520.9 |[pic][pic]|
| | | | | |[pic][pic]|

Source: (Bloomberg BusinessWeek, 2013)

Garmin will increase its profit margin each quarter through new product design and implementation. Garmin sales have been on the decline over the last few years because of mobile phone applications and use but with some new service Garmin can increase its shares. Mobile phones applications are limited and Garmin can incorporate services that mobile devices will not be able to match. This will have a significant increase in automotive and fleet GPS sales. Garmin can increase its growth percentage in there automotive marketing segments. Pairing with retail companies and logistic companies can increase growth of their new products and service every quarter. Joining forces to have insurance companies offer discounts for GPS devices with certain features will increase the growth potential in personal GPS devices and logistic GPS device. So it is crucial for Garmin to maintain a significant R&D budget to increase future development and stay the leading provider of GPS products and services.
4. Target Markets According to Gfk Survey around 55% of all adult Americans own some kind of GPS.
Of the owners 17% own a device that is built into their cars and 55 % owners have cell phones GPS devices. This 66% owner is the market Garmin needs to target in order to increase its market shares. Also the younger adults aged around 18-24 do not tend to buy cars with GPS units built into the car or own a portable GPS unit device. This age group is more likely to use a cell phone device. Garmin will need to mainly target 25+ year olds to increase sales (Gfk, 2012).
Table 2
GPS/Navigation Device Usage
(Gfk,2012) Garmin needs to get more competitive with mobile services. In getting more competitive Garmin needs to be able to offer services that mobile services cannot compete with. When Garmin can offer these services they need to become more visual to the public. They will need to become the top brand name in most retail stores and on line buying sites. Garmin will need to inform the customer of all benefits that the customer can expect with their new products and services. Garmin’s target markets need to include parents, logistic companies, bus services, taxi services, insurance companies and automotive makers.
5. Positioning Garmin will position itself as the premier Global Positioning System (GPS) Company. Garmin will achieve this position by incorporating new technology that its competition does not possess. The GPS device will be marketed to businesses, insurance companies, and for personal use. Garmin will be delivering a superior product which will benefit their customers in their daily activities. Garmin is the best source for selection and price of GPS technology equipment and services. Customers will be impressed with, and return for, the great existing and new technology being incorporated into the devices, value-oriented pricing, quality, ease of use, and excellent customer service. With the unstable economy and consistently rising gas prices, Garmin’s GPS will direct customers to their desired location, while eliminating traffic congestion spots saving costumers time and money and realize the greater value for the dollars they invest.
6. Strategies The single object is to position Garmin as the premier source for Global Positioning Systems (GPS) technology in the domestic market as well as the international market, maintaining and increasing the majority of the market share. The market strategy will seek to first create customer awareness regarding the products and services offered, develop that customer base, establish connections with targeted markets and work toward building customer loyalty and referrals. Garmin will communicate their marketing strategy through their in-house advertising agency. Gamin’s three main marketing strategies are: 1. Increase awareness and image. 2. Leverage existing customer base. 3. Create new customer base. One of Garmin’s main marketing strategies is to increase awareness and image by informing those not yet aware of what Garmin has to offer. This can be accomplished through a referral program that offers discounts and services for each referral. Garmin can build a relationship with different companies consisting of but not limiting to logistic companies, insurance companies, and rental car companies. Garmin can also expand its image by building organizational relationships. They can co-sponsor found raising activities and host charitable events and benefits. Another of Gamins main market strategy is to leverage its existing customer base to secure its sales in the future with a loyal customer following. This will be achieved through sales promotions, exceptional customer service, and follow up contact with questions or concerns, and shopping support in stores and on line. Garmin can also hold demonstrations for all customers to show case all technology incorporated in their products. The third main marketing strategy is to gain a new customer base. Garmin will introduce new technology, monitor the quality of service and products, and create new advertisements, offer promotions, and support local charity events. Garmin will also need to pay attention to pricing, and channel distribution for product availability and prompt delivery.
7. Marketing Mix In brief, Garmin’s marketing mix is comprised of pricing, distribution, advertising promotion, and customer service. Pricing of the new Garmin will be based on a per-product retail price. Since, Garmin will be the only GPS Company with this new technology Garmin’s goal price will be slightly higher but not more than 5% above its competitor’s price without this technology. This will insure competitive pricing with technology advantage. This pricing strategy is based on the value to the customers compared to other closely related products. Looking at current pricing, of the Garmin nuvi 3597LMTHD at $379.99, then the new product line will start around $399.99(Garmin, 2012). Distribution will include direct to customers from on line sales and retailers. Garmin deals with a number of distributors to sell its products. Much of Garmin’s sales come from networking with retailers such as Best Buy, Target, Wal-Mart, Sears, and Costco. Garmin also has a wide range of strategic alliances with on line distributors such as (Garmin, 2013). Advertising and promotions will be driven through their in house advertising agency. Garmin will also use its distributors as a strategic competitive advantage in marketing by using its distributors as an indirect source of marketing in localized segments. Garmin will offer life time map updates and coupons to promote the sale of their new products. Customer service is an important aspect in the way Garmin does business. Garmin’s customer service and technical support include order processing and answering customer questions, concerns, and claims. Customers will be able to contact Garmin through its website, telephone, e-mail, and other electronic forms. Garmin’s customer service and technical support is a free service to customers and potential customers.
8. Marketing Research Garmin uses an in house advertising agency that also conducts its own marketing research. In conducting their research Garmin will continually shop stores carrying competitors’ products and view competitors web sites for competitive information. They will monitor customer complaints and questions. Garmin will need to measure and analyze customer response and attitudes towards competitor’s products. Garmin will need to insure that retail stores carrying their product are knowledgeable about Garmin products and provide a friendly atmosphere. Garmin will need to conduct market test and surveys to determine if consumers are willing to pay for the value of the new product line. They will also need to conduct some focus group studies to develop and fine-tune the real time traffic alternative routing and video system recording.
4. Controls Since the Automotive GPS is not a new product in the market, significant advertising will have to take place in the beginning months in order to educate and inform the target market of the new product features. The first year will be dedicated to increase awareness of the product. Garmin will send samples to major logistic companies and rental car companies. Garmin will hold informational sessions with all target markets including insurance companies and retail sales personal. In order to measure product success, the following controls need to be monitored: • customer satisfaction • revenue (monthly tracking) • new customers • repeat customers • referrals
The marketing team will be conducting follow ups and receive feedback on Automotive GPS products. This will enable Garmin to assess product weakness and strengths and modify the product as needed. They will also be able to monitor demographic responses and modify their marketing campaign. Implementing these controls will guide the success of the new Garmin features and keep Garmin within budget, increasing customer satisfaction, and increasing the profit margin.
1. Implementation According to its annual report, in 2012 Garmin posted a slight increase in revenue from $2.69 million in 2010 to $2.76 million in 2011 but they had a decrease in net income in 2011. According to Figure 2 Garmin’s revenue and income are on a decreasing trend. Looking at this trend Garmin needs to focus on improving their product line and increasing their profits. Research and Development states that Garmin 2012 projection is to expand and increase their investment even more, as evidence in Figure 3. Garmin increased their expenditures by $22 million to advance the development of new products. Currently Garmin operates multiple R&D facilities across the country, employing anywhere from 10 to 300 employees and opening a new facility in Tulsa. They operate these small facilities around the country to find superior skilled workers (Evatt, 2012). This demonstrates Garmin’s willingness and ability to stay competitive in the changing market.
Figure 2. Annual Report (

Figure 3. Annual Report (

The process on implementing Garmin’s new Automotive GPS product begins at the research and development stage where the development and engineering team work together to create a prototype. Prototypes will be tested and provide feedback to incorporate needed changes into the design. This is not a new product but a major upgrade to existing product so Garmin’s primary concern after creating the new GPS product is distributing knowledge of the product. Garmin will place advertisements in automotive magazines, television commercials, and web sites. Garmin will distribute trial samples to logistic companies, rental companies, and automotive dealers, while providing promotional discounts at all Garmin approved retail and E-Commerce stores. The advertising, marketing, and distributing timing is visible in Figure 4.
WBS |Tasks |1/1/2013 | |7/1/2013 | |1/1/2014 | |7/1/2014 | | | | | | | | | | | |Task 1 |R&D | | | | | | | | |1.1 |Research | | | | | | | | |1.2 |Design | | | | | | | | |1.3 |Test Prototype | | | | | | | | |1.4 |Mass Production | | | | | | | | |Task 2 |Advertising | | | | | | | | |2.1 |Web Sites | | | | | | | | |2.2 |Magazines | | | | | | | | |2.3 |Television | | | | | | | | |Task 3 |Retail | | | | | | | | |3.1 |Logistic Companies | | | | | | | | |3.2 |Rental Companies | | | | | | | | |3.3 |Automotive Dealers | | | | | | | | |3.4 |Garmin Retail and E-commerce stores | | | | | | | | |Figure 4. Garmin’s Automotive GPS Gantt Chart
2. Marketing Organization Garmin is a large corporation so the organizational chart is going to focus primarily on the primary marketing positions in the company as appears in Figure 5. While Research and Development and Engineering developed the newer automotive GPS product the majority of success will be the responsibility of the Marketing department.
Figure 5. Garmin’s Automotive Marketing Organizational Chart
3. Contingency Planning Difficulties and Risks Problems separating this GPS product from other GPS products An established competitor entering into the market a similar version of Garmin’s product Slow sales results and negative feedback from consumers Unexpected and excessive cost lowering the profit margin
5. Conclusion Garmin Ltd is a market leading company that supplies navigational products to multiple industries. If Garmin wants to remain a market leader in automotive GPS devices in the years to come, it needs to develop a product that is not matched by competitors and includes capabilities that cellular mobile devices will not be able to implement due to software and hardware restrictions. Gamin has the internal capabilities and finances to develop and incorporate new technology. These capabilities give Garmin the potential to prosper in the ever changing GPS market, due to the company’s superior research and development teams and aggressive internal marketing agency.
Evatt, R. (2012). GPS maker Garmin opens Tulsa research, development facility. Retrieved from
Funding Universe. (2004). Retrieved from
Garmin. (2012). About Us. Retrieved from
Garmin. (2012). FAQ’s. Retrieved from
Garmin. (2004). LTD History. Retrieved from
Garmin. (2012). Revenue Quarterly YoY Growth Retrieved from
Garmin. (2009). Annual Report. Retrieved from
Garmin. (2012). Annual Report. Retrieved from
Garmin. (2012). Communications. Retrieved from
Garmin. (2013). Dealers That Sell Online. Retrieved February 16, 2013, from
Gfk. (2012). Insights: Product Usage. Retrieved from
Lendino, J. (2011). Garmin Revamps Entire Product Line for 2012. Retrieved from,2817,2391648,00.asp
Lendino, J. (2012). Garmin vs. TomTom: Which GPS Should I Buy? Retrieved from,2817,2409093,00.asp
O’Brien, K. J. (2010). Smartphone Sales Taking Toll on G.P.S. Devices. Retrieved from
Garmin. (2012). Products. Retrieved February 16, 2013, from
The GPS Specialist. (2013). Why Garmin. Retrieved from
Board of Directors

President& CEO

Director Finance & Admin

Vice President Marketing

Director Operations

Director Sales







Product Manager Automotive GPS

Associate Production Manager

Marketing Assistant

Engineering & Development

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