Chapter 1: Introduction
1.1 Introduction to the chapter
There is a rapid development of information technology across the world with creativity & innovation, where ideas emerge as new techniques of service provision, technology & communication. The world today has seen revolutionary changes in development. The innovation should be perceived and understood in true sense. In the previous century it was industrial revolution now it's the revolution of IT and communication, which is a decision factor for the future. Recent emerging telecommunications technology drives the fundamental changes in the way the mobile industry does business, the ability to offer a differentiated product or service experience to the mobile customers has become key competitive advantage (Lee 2009). This chapter discusses all about background of this research where in describing why the author is interested in doing this research dissertation, mentioning the aims and objectives of this research and finally presenting the dissertation structure in brief chapter wise.
1.2 Background of the research
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Author is very much interested in this topic as is it about a revolutionary trend in telecommunication and about calling the world at less. This dissertation is all about mobile communications, mobile industry and SIM card industry. The topic of this dissertation is “Marketing strategies of a MVNO: A case study of LEBARA Mobile”. The company LEBARA Mobile is an MVNO which is used as a vehicle to understand the marketing strategies of a mobile company and to know how it segments and targets a market where it can establish itself, further knowing about customer approach and service strategy of the company.
1.3 Aims & Objectives of the research
The aim of the research is to examine and understand marketing strategies of LEBARA Mobile.
* To identify the key marketing strategies of LEBARA Mobile
* To analyze the customer approach strategy used by LEBARA Mobile
* To assess the efficient service strategy of LEBARA Mobile
1.4 Proposed Methodology
There are various methodologies available to do this research dissertation like qualitative and quantitative research methods but author has chosen quantitative method to do the research as it would be more appropriate and suitable to do this research. As part of research philosophy positive, realist and phenomenal are understood in general but Positive approach has been taken as part of research philosophy, these methods are mainly used to find out the main marketing strategies of the company through research strategy method like questionnaires, observation and experiment but questionnaires and direct interviews are used as major research instruments for this research study, and criteria for observation analysis is done through understanding the questions used in questionnaires and interviews. The other major part is respondent identification and collecting data for this research, employees of the company in various locations are the key respondents and direct approach is used in collecting primary data.
1.5 Structure of the dissertation
The chapter 2 discusses much about the mobile phone industry and SIM card industry including GSM as the dissertation is all about the mobile telecommunication based on a company called LEBARA mobile which is used as a vehicle to understand much about the marketing strategies of a mobile company, especially like LEBARA Mobile which is an MVNO. An historic overview is mentioned in detail about technical development and other issues related to mobile &SIM industry. This chapter also discusses about mobile telephone development in Europe, UK and USA as this dissertation is a study is based on these locations. This chapter will make a basic understanding of the mobile communications and its growth.
The chapter 3 is all about literature review of marketing, types of marketing like online marketing, direct marketing and also discussing about marketing strategy which is a plan of action which includes elements of marketing strategy further discussions continue such as marketing mix all about product, price, place and promotion. Channels of distribution and elements of distribution system with channel support are also discussed. The next discussion is about marketing communications which is all about advertising like print, visual and audio. The strategy is like push versus pull strategy is also discussed. Consumer behavior, marketing cycle time is discussed as well. The next discussion is about competitor's analysis of competitors, niche competitors and steps to understand competitor's behavior in the industry like competitors current strategies, competitor's objectives and assumptions, resources and capabilities to with stand competition. The next discussion is about sales strategy including sales promotion. Further discussion consists of market segmentation and targeting strategy like how market can be segmented using variables like demography, geography, psychographic variables discussion complete segmentation scheme with product value, long run potentiality, resource commitments, supply and demand conditions. Finally the chapter discusses about customer relationship management with its objectives, needs and analysis, planning and process of customers relationship management. The major topics covered for research purpose are marketing strategies, market segmentation and customer relationship management. This chapter is considered to be one of the main parts of research and contains all required literature for the research to be undertaken according to aims and objectives of the research.
Always on Time
Marked to Standard
The chapter 4 mainly discusses about the organization LEBARA, its establishment and its services including its existence in various countries. The product and its services are discussed especially its special features so as how it can attract people and survive in the market. MVNO is also discussed as major topic as company is also an MVNO, discussing mainly about the strategic alliance with the main service provider Vodafone and its business strategy. This chapter covers the important topics mainly LEBARA & MVNO. In this research LEBARA which is an MVNO is taken as case study to know about its marketing strategies.
The chapter 5 is all about methodology discussing about different techniques, methods of data collection and selection of most suitable method for this particular study. The chapter also discusses about research philosophy, different approaches like positive, realistic and phenomenology finally choosing positive research for the study. Selection of method for data collection is one of the most critical parts of this research for which both qualitative and quantitative are discussed and quantitative method is selected for doing the research. The objective of this research is to know about marketing strategies implemented by LEBARA mobile, it is very important to first identify the marketing strategies applied by LEBARA mobile. Sources used for this study are interviews, articles and knowledge of marketing strategies. The purpose of getting information was served by interviewing employees of LEBARA mobile. The primary research was conducted to obtain information directly from the employees who are implementing the marketing strategies. A secondary research was also carried out to understand the marketing activities in general. The questionnaire is discussed in detail and explaining each question individually as why it is used as part of criteria observation analysis. Finally respondent identification is discussed and data collection methods are explained, main respondents of this research are employees of LEBARA Mobile working in various locations and data is collected through them.
The chapter 6 discusses about
Chapter 2: Mobile Telecommunications
2.1 Introduction to the chapter
This chapter discusses much about the mobile phone industry and SIM card industry including GSM as the dissertation is all about the mobile telecommunication based on a company called LEBARA mobile which is used as a vehicle to understand much about the marketing strategies of a mobile company, especially like LEBARA Mobile which is an MVNO. An historic overview is mentioned in detail about technical development and other issues related to mobile &SIM industry. This chapter also discusses about mobile telephone development in Europe, UK and USA as this dissertation is a study is based on these locations. This chapter will make a basic understanding of the mobile communications and its growth.
2.2 Mobile phone industry:
A mobile phone is also known as cell phone or handheld phone it is an electronic device primarily manufactured to communicate, today it's a major mode of communication. It is a transmission of data through a cellular network which offers to a limited range depending on the tower capacity to send signals. Cell phones connect to a cellular network which consist of switching points and base stations which are owned by a mobile network operator. Today the communication has developed from voice transmission to additional features and services like SMS for text messaging, e mail, internet, video calling, radio and GPS. According to the International telecommunication union in 2008 there are more than 4.3 billion subscriptions worldwide.
The history of mobile telephony goes back to experiments in the US in the 1920s with radio telephony (Kargman, 1978; Agar, 2003). The first mobile phones were usually car-bound and AT&T launched in 1947 a highway service between Boston and New York after the success of first mobile telephone network in St. Louis (Agar, 2003). Eventually radiotelephony became so crowded, especially in New York, that the network operators used waiting lists while candidate customers waited hoping to be so lucky to get a mobile phone connection (Agar, 2003). The reason for the waiting lists was that frequency spectrum is a limited resource. The arrival of modern automatic mobile telecommunications systems using cell structure helped to reduce the scarcity problem by offering a more efficient use of the frequency space. Two problems are critical in a cell structure - roaming and hand-over. Roaming is needed to keep track of the telephones and hand-over is needed to enable subscribers to keep a telephone call when moving from one cell to another. Motorola filed already in 1973 for cellular patents and the US Federal Communication Commission (FCC) started auctions of cellular licenses on a city-by-city basis before the break up of the Bell system in 1984. These auctions provoked so many applications that the FCC in 1982 decided to award the top thirty cities directly and to allocate the other cites by means of lotteries (Agar, 2003). After the launch of advanced mobile phone services or AMPS in 1978, which was an analogue system, the first American cellular phone system came into operation in 1979 as a trial and went into commercial operation in 1983. These services were basically city services and the myriad of mobile phone companies made roaming extremely difficult in the US.
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Mobile telephony developed in a slightly different manner in Europe. Sweden was an early mover with an automatic system in service in 1956. The national telecommunication authorities in Scandinavia took two important decisions in 1969-71. The first decision was to start the standardization work on the future analogue cellular NMT standard in 1969. A working group was set up and named the Nordic Mobile Telephone Group, the NMT-Group. The second decision was to directly build manual mobile telecommunication networks with nation wide coverage to satisfy customer demand. This decision was in Sweden accompanied with another decision to let the market free for mobile telephones. The Nordic Mobile Telephone Groups took as a point of departure the following system requirements: automatic in operation, compatible, roaming between all Nordic countries, sufficient capacity, high reliability, low-cost infrastructure, and open specification which meant no exclusive supplier rights (Steinbock, 2001). It took more than 10 years to develop the NMT standard and it was first introduced in Saudi Arabia in 1981 and a few months later in the Scandinavian countries. The possibility of roaming in the Finland, Sweden, Norway, Denmark and Iceland since 1981-82 became a strong argument in favor of the NMT standard.
In the early 1980s there existed many different competing mobile telephone standards. When the Department of Trade and Industry and the two network operators in the United Kingdom (British Telecom and Cellnet) were selecting the standard of the new mobile telephone system they compared the NMT, with a Japanese (analogue) standard worldwide in use since 1979 by Nippon Telephone & Telegraph (NTT), the German system C450, a system developed by Alcatel and Philips called MATS-E and the US standard AMPS. The American standard was found to meet the requirements of the British market - competition was secured as the standard was available from several suppliers and it allowed sufficient capacity as it operated at a frequency band only 70 MHz below the 900 MHz band. The two appointed operators and the Department of Trade and Industry in 1983 decided to modify the American standard Advanced Mobile Phone System (AMPS) and named it Total Access Communication System (TACS). A third applicant for a license in the UK named Racal the predecessor of Vodafone heavily influenced this decision. The reason for choosing the US standard was the assumed attractive price of handsets because of the large US market. However Ericsson became the supplier of TACS based on its AXE digital switch to Vodafone while it already supplied NMT and AMPS. This occasion made Ericsson a major player in the business of mobile telephony.
The GSM: One of the shortcomings of the analogue systems was a serious lack of interoperability. In order to bring interoperability and cross border roaming on a higher level the Groupe Spe´ciale Mobile (GSM), later renamed Global System for Mobile Telecommunications, was an initiative combining private and public governance (Pelkmans, 2001). GSM is an open non-proprietary and interoperable digital standard for cellular mobile systems operating in the 900 and 1800 MHz band. A first step towards a mutual European system was taken in 1982, when the Conference on European Posts and Telecommunications (CEPT) decided to create the Groupe Spe´ciale Mobile which was commissioned to develop a mobile telephone standard. The European Commission considered it to be necessary that European network operators made a commitment to implement GSM-networks. The reason was that projections for the future growth of mobile telephony in the latter part of the 1980s were modest and analogue networks were expanded throughout Europe. This commitment convinced the industry to make substantial investments in research and development for the GSM standard. A Memorandum of Understanding to introduce GSM networks by January 1, 1991, later put forward to July 1, 1991, was signed in Copenhagen in 1987 by operators and regulators from thirteen European countries (Hulte´n and Mo¨ lleryd, 2003). In 1989, the European Telecommunications Standardization Institute approved the specification of phase 1 of GSM. This ended the (pre-standard) effort in which essential patents were registered. Philips owned the most essential patents in this period. However Ericsson, Alcatel, Siemens and Motorola intensified their patent activity in the following period (from 1992 onwards). These firms controlled more than 85% of the total GSM market in the early 1990s and Motorola owned most of the essential patents. Motorola, Ericsson and Nokia rapidly came to dominate the mobile telephone market with Siemens and Alcatel as other important players (Bekkers et al., 2002).
2.3 SIM card industry
A small micro chip called Subscriber Identity Module or SIM card is required for a GSM phone to make calls and receive calls like wise for using other services provided by the operator. This chip is sold by operator or resold by a retailer who is been authorized by operator. It is required to operate a mobile phone and it stores the active data and it is pre cond by the operator to work on the network of that particular operator. This can be used on any GSM phone which is unlocked, in some occasions the SIM cards are been manufactured to run on a particular handsets suitable to meet the requirements of that particular operator. Each SIM card is activated using a numerical identifier which is unique and once activated the identifier will be permanently locked upon to that activated network. This is the major reason many of the sellers do not accept the return of activated SIM card. SIM is a detachable smart card which contains user subscription information and other facilities like phone book, messages inbox, preloaded fixed numbers by the operator and some activated settings to use internet provided by that particular operator. The information can be stored well and then that can be used on any other handset, there is a facility to lock that SIM card by the operator when it is stolen or lost. These SIM cards are generally sold in combination with a mobile phone at a subsidized price to sell more subscriptions and activations, SIM cards are allocated with a certain phone number provided by the operator and the same number can be transferred on to other SIM card of the same provider. In special cases when a customer is switching in to another network he can transfer his existing number in to new operators SIM card through bringing an old portable accessibility code provided by the original existing operator. A SIM card should by essentially and easily accessible to customers and it is a responsibility of an operator to sell his services. SIM card securely stores the subscriber key (IMSI) used to identify the location and user, which can be used on computers and mobile phones. SIM cards are available in two sizes which are standardized, first is of a size of a credit card which is 85.60mm x 53.98mm x 0.76mm, second size is of width 25mm, length of 15mm and thickness of 0.76mm which is more popular miniature version. The first SIM card was made in 1991 by the Munich smart card maker Giesecke & Devrient which sold 300 SIM cards to the Finish operator Elisa Oyi, formerly known as Radiolinja. Each SIM card stores unique International Mobile Subscriber Identity (IMSI) in which Mobile Country Code is represented by the first 3 digits, Mobile Country Code is represented by next 2 digits and the mobile station identification number is represented by next 10 digits. The SIM card introduced a new and significant business opportunity for telecom operators, especially MVNO which does not operate a cellular telecoms network, but leasing out capacity of a network operator and only provides a SIM card to it customers.
SIM operating systems are of two types like native and java card. Native SIM cards are based on proprietary or vendor specific software, Java SIM cards are mostly based upon standards, which is subset of its programming language which specifically targeted for embedded devices. It allows SIM card to contain programs which are hardware independent and interoperable. The authentication process takes place when the mobile equipment starts up obtaining IMSI from SIM card passing it to mobile operator requesting access and authentication. It might be possible that the mobile equipment needs to send a PIN to SIM card in prior so that SIM card reveals this information. These SIM cards are also present in many of the smart identity cards and driving license of many countries, it is a technological revolution.
Chapter 3: Marketing Strategy
3.1 Introduction to the chapter
This chapter is all about literature review of marketing, types of marketing like online marketing, direct marketing and also discussing about marketing strategy which is a plan of action which includes elements of marketing strategy further discussions continue such as marketing mix all about product, price, place and promotion. Channels of distribution and elements of distribution system with channel support are also discussed. The next discussion is about marketing communications which is all about advertising like print, visual and audio. The strategy is like push versus pull strategy is also discussed. Consumer behavior, marketing cycle time is discussed as well. The next discussion is about competitor's analysis of competitors, niche competitors and steps to understand competitor's behavior in the industry like competitors current strategies, competitor's objectives and assumptions, resources and capabilities to with stand competition. The next discussion is about sales strategy including sales promotion. Further discussion consists of market segmentation and targeting strategy like how market can be segmented using variables like demography, geography, psychographic variables discussion complete segmentation scheme with product value, long run potentiality, resource commitments, supply and demand conditions. Finally the chapter discusses about customer relationship management with its objectives, needs and analysis, planning and process of customers relationship management. The major topics covered for research purpose are marketing strategies, market segmentation and customer relationship management. This chapter is considered to be one of the main parts of research and contains all required literature for the research to be undertaken according to aims and objectives of the research.
3.2 Marketing Strategies
Marketing is concerned with the exchange relationship between the organization and its customers. Promotion of the company products and services is done through proper marketing methodology so that it can get a good recognition in the market. Quality and customer service are key relationships in relationship marketing. Bringing quality, customer service and marketing together brings in a successful organization, as quality of the service is mandatory for a company to excel and strive through competition. Customer satisfaction is critical in maintaining relationships, the more the relationship marketing the higher the company growth. A constant interaction with the customers is required to take feedback and upgrade the service facilities so as to retain the existing customers, as retaining existing customers is less expensive than getting new customers. The company should also give good services to the customers as part of value improvement. Customer service plays a critical connecting role in the pre sale, sale and post sale interaction (Christopher 2001). Choosing the right customers is important because some customers do not offer the potential to create value, either because the costs of serving them exceed the benefits they generate, or because the company does not have the appropriate bundle of skills to serve them effectively. Management needs to be deeply committed to marketing because marketing drives growth. The essential idea of marketing is offering customers superior value. The marketing approach to create customer value is based on three principles. First, it recognizes that in choosing between competing companies, the customer will select the offer that he or she perceives to be of best value. Second customers do not want product or services for their own sake, but for meeting their needs. Third, rather hand having just one off transaction with a customer, the firm will find it more profitable in the long run to create relationships, where by trust is established between them and customers remain loyal and continue to buy from the business. To get in to a position to offer superior value to customers, the company must first understand their needs. If needs of a customer are met then the customer gets satisfied with the service and does not think about switching over to other competitor. Customers naturally want to deal with companies that they believe will solve their problems (Doyle 2008). Market Share Growth is a strategy to increase the marketer's overall percentage or share of market. In many cases this can only be accomplished by taking sales away from competitors. Consequently, this strategy often relies on aggressive marketing tactics. There are various types of marketing, three main types of marketing: undifferentiated marketing, differentiated marketing, and concentrated marketing.
* Undifferentiated marketing assumes everyone is the same and aims a particular product at everyone. Advantages: easy to plan, doesn't miss anyone. Disadvantages: can be wasteful, ignores segmentation, can lead to disappointing sales.
* Differentiated marketing aims the product at specific segments in the market. The company may be trying to sell exactly the same product to different segments but it will change its promotional methods and the image it creates. Advantages: separate mix can be developed for each segment and different markets can be easily identified. Disadvantages: Can be costly, message may by-pass some customers.
* Concentrated marketing is when the message is aimed at just one small market. Advantages: Small firms can concentrate their marketing, allows a specific mix to be developed. Disadvantages: Ignores other areas of the market, can cause problems in future as may make it more difficult for company to expand.
Marketing can be done through different ways to reach the customer. Marketing strategies influence directly to thinking of the customers who are in need of that service. Direct marketing is the fastest growing segments in the marketing industry are the direct marketing. It is a strategy to build stronger, more personal relationships between the buyer and selected customers directly. In other words there are no intermediary promotion or distribution channels between the buyer and seller. Direct marketing entails providing a marketing offer specifically tailored to the needs or wants of a narrowly defined segment. It facilitates customizing the product (Moore 2006). Kiosk marketing is the final method of direct marketing is called kiosk marketing. It entails placing a mobile stand in a place where the customer is most likely to be. The kiosk may be manned by one or two people. The level of interaction between customer and seller in kiosk marketing is generally low because they are used primarily to gather or disseminate information (Moore 2006). Success in the market place is dependent not only upon identifying and responding to customer needs, but also upon our ability to ensure that our response is judged by customers to be superior to that off competitors (Hollensen 2007). “Any plan can only be good as the information on which it is based, which is why we have been making sure that we know the right question to ask” Marketing planning is simply a logical sequence and a series of activities leading to the settings of marketing objectives and the formulation of plans for achieving them (McDonald 1999). Exhibitions and trade fairs are widely regarded as a powerful way for firms to reach large number of potential customers face-to-face at a cost far below that of calls by sales people. It is probably the most modern businesses use to market their products. Understanding the niche market is important for a company to target, Niche Market is a strategy which looks to obtain a commanding position within a certain segment of the overall market. Usually the niche market is much smaller in terms of total customers and sales volume than the overall market. Ideally this strategy looks to have the product viewed as being different from companies targeting the larger market. Status Quo is another strategy which looks to maintain the marketer's current position in the market, such as maintaining the same level of market share (Blythe 2005). Marketing plan should be linked to company's business plan to ensure that it is compatible with the production, sales and finance areas (Grumpert 1992). The plan is never complete. It needs to be regularly monitored, updated and improved Good marketing plans begin by analyzing what is currently happening and what has happened in the past. It is impossible to develop solid plans for the future if the current situation is not clearly understood. The more clearly the company understands what customers want, the more likely the company's marketing strategy is shaped by its customers, who are constantly changing their tastes, desires, and needs. Marketing is becoming the only thing that differentiates high technology services, as the companies are being forced to base their services on identical technologies to cope with the persuasiveness of technical standards (Davidow 1986).
Online marketing is a rising star in the world of marketing. The web continues to explode and along with it so do the advertising opportunities. Billions and billions more advertising pounds are spent every year online, as business try to find ways to tap into the Internet user. Internet marketing strategy is needed to provide consistent direction for organizations e-marketing activities so that they integrate with its other marketing activities and supports its objectives. Internet marketing strategy has many similarities to the typical aims of traditional marketing strategies (Chaffey 2006). The e-marketing has captured many of the upcoming generation to which the company can approach and make them as their customers. Special campaigning of value added services for the customers who use the web services, making the best value for the services provided. Value-added services - messaging, mobile-commerce, location services, content provisioning - are the money-makers in today's telecommunications market. A company can commercially offer these services without having to own its own telecommunications network. Telecommunications re no longer the exclusive domain of a few national PTTs they have become a competitive market like other (Zuiweg 2005). With voice becoming more and more of commodity, starts to have new types of offers in the market. As the market reaches maturity, the need of value added service increases (Michael 2005). Pricing in telecommunications sector used to be regulated but now it has been left to the market forces. The competitive forces will lead to prices reflecting the cost of providing services and including efficiencies in firms (Gruber 2007).
Strategic marketing is a process of analyzing opportunities, choosing objectives, developing strategy and formulating plans (Kotler 1976). Planning should not be directed at redirecting the unpredictable, but at designing strategies for coping with the unpredictable (Linstone 1977). To choose among opportunities, a company must refer to its basic purpose and mission that should be defined in terms of meeting generic needs not producing particular services. For any opportunity, the company must develop a well-integrated set of objectives that are hierarchical, quantitative, realistic and consistent.
Marketing strategy is a plan of action designed to achieve certain defined objectives. In business firms objectives can be termed as sales volume, rate of growth, profit percentages, market share and return on investment (ROI) among others. The importance of defining objectives is to give purpose and direction to strategies cannot be overestimated. Strategies are developed at multiple levels in the organization such as corporate, business unit, divisional and departmental. All these put together they form an integrated plan for the enterprise as a whole. Thus corporate strategies are the sum of business unit strategies plus any plans for new business initiatives as well. Marketing strategy is the heart of any business plan. Businesses exist to deliver products and service to markets. To an extent they serve purpose well and efficiently, they grow and profit. Some other components of a business unit strategy like finance, production and R& D must support the business marketing mission. Marketing objectives and strategies have to be formulated to take account of the firm's core competencies as well as its resource limits. Marketing strategies encompassing advertising and promotion as well as communication tactics are used aggressively as important competitive tools (Kotler, 2003, p. 609). The first objective is to make the best customer prospects aware that a service is now available; to tell them what it does, what are the benefits, why claims are to be believed and what will be the conditions for consumption (Enis 1985).
Elements of marketing strategy: Marketing strategy is composed of various elements which are interrelated. The first important element is product/ market selection. What markets will we serve with what product lines? Second major element is price. What prices will be set for individual products, how will the products in line can be related to each other, will they offer quantity discounts, deferred payment plans and rental options, what kind of promotions will be needed to compete effectively? Distribution system is the third element the wholesale & retail channels through which products and services move to ultimate users. These may include such business enterprise as the company's sales force, independent distributors, agents and franchised outlets. The fourth element is the market communications includes components such as print, television advertising, direct mail, trade shoes point of sales merchandise displays sampling and telemarketing. The combination of various factors and relative emphasis on each in a marketing program is called marketing mix. It varies considerably from one product / market to another and over various stages of the market growth. For example some companies may rely primarily on television advertising and some on direct mail depending on the business factors and others on technically trained sales force. The marketing mix may vary even among competitors selling the same product in the same markets. In any marketing mix there are four primary elements which are to be considered: product / market selection, pricing, distribution and market communications, finally presenting model of a strategic planning.
Product is the total package of attributes the customer obtains when making a purchase. Product benefits might include what the product offers such as service and its technical assistance and value of a brand name in terms of product quality and reliability with assurance of the product availability and through this a personal relation may develop between the buyer and seller. A SIM card can provide technical service or car provides transportation facility with status. It depends on the products features. Thus a product meaning can be defined in terms of full range of benefits, risks and disadvantages the buyer obtains with the purchase and use, including buying experience.
The major thing that counts for strategic planning purposes is the prospective purchaser's opinion and the value placed by customer on the seller's product versus competitive offerings. It is important to distinguish however between perceived value and potential value. The first is the customers existing perception of the product. The latter is what the buyer can be educated to recognize. The realization of potential value is accomplished through market communications.
Market refers to a place where buyer and seller meet or to a retail outlet to a set of potential customers. Market is a pocket of latent demand. Market opportunities may rise from a wide range of exogenous factors. A major source of market opportunities is new technology in field like electronics and communication. Population growth and increase in national and personal incomes also create new markets and expand existing ones. Societal needs, shifts in culture and style, entertainment, art and communications also lead in market opportunities.
Channels of distribution: Distribution systems include the firm's personal sales force, with wholesale distributors and retail outlets providing geographically structured market coverage. E- Commerce channels in particular internet has brought in new dimensions to distribution infrastructure worldwide. In structuring sales channels firms have lot of options, few of them are like whether the business will sell through a field sales force direct to its user-customers or rely largely on middlemen. If the later, what kind of resellers will be needed to reach firm are markets and will they be recruited selectively or intensively in any given geographic area? Most distribution systems compromise mix of intermediaries based largely on the nature of product, market demographics and buyer behavior.
Elements in the distribution system: The primary components of any distribution system would include direct sales representatives, sales agents, distributors and retail dealers. Direct sales representatives are employees of the firm and call directly on its customers. They are particularly economical and effective in serving accounts that they buy in large quantities and need extensive product service, technical support, and product customization. Sales agents are independent operators who generally carry out the lines of several suppliers. Their customer profile is very much like that of direct sales force but because they are on commission, they represent a variable cost. Agents are the channel of choice if the firm does not have the resources to support an in house sales organization. In addition hey are often used as first stage intermediaries in entering new and unfamiliar geographic or product markets. Distributors buy from many suppliers and have wide product lines. Their role is to serve customers who purchase relatively small amounts of items at any one time and want ready and reliable availability. Most distributors are independent businesses operating as single outlets or chains. Look for distributors capable of developing markets rather than those with few customer contacts. Long-term goals must be kept in mind and prime importance should be obtained from them. As Arnold (2005) noted, the most obvious distributor is not necessarily the best partner for the long term. Treat the local distributors as long term partners and not temporary market entry vehicles. The structure should be developed as a relationship of partners.
Cost factors: firms with supply sources and resale outlets should cut distribution costs is a high priority, any savings there drops to the bottom line. Cost efficient distribution system typically depends on best logistics system.
Channels support: successful distribution depends on how effectively suppliers support the channels through which their products move markets. In working with intermediaries, the suppliers seek to assure that its products are stocked and available at the resale level; resellers actively display, advertise and promote the products to end customers. Resale prices and margins do not deteriorate. The supplier's interest in preserving resale price levels comes out of a concern for sustaining reseller interest in marketing the product.
Market communications: Any list of communications channels available to marketers would include print media like newspapers, magazines, and trade journals, television, direct mail, telemarketing, trade shows, and point of sale displays, personal sales forces and third party influencers. Putting these together effectively in a communications mix requires an understanding of how buyers make purchasing choices that is the decision making process DMP and the decision making unit DMU.
The decision making process typically moves through several stages depending on whether this is repeat purchase or a new buy. Stages may include like awareness of need, search for information, identification of options, source qualifications and short listing, selection and post purchase affirmation of the buy decision. The process will be shaped according to the purchasers previous buying and product use experience and whether one or more people are involved in the buy decision. A key point of marketers is that the communications vehicles needed to influence purchasing decisions are likely to be different at different decision making stages.
Push Vs Pull strategies: a particular choice some marketers may have make is whether the communications strategy should be designed primarily to create an end market demand and thus pull the product line through its distribution channels or offer its resellers extensive incentives to promote push - the product to end users. Such incentives would usually include high dealer margins, sales aids, cooperative advertising and sales contests.
In consumer marketing, the choice will rest on what kinds of buying influences like advertising messages or sales clerk recommendations are likely to be more persuasive. Pull strategies, because of the scale of upfront advertising investments are often costly justified only by large potential markets.
Pull elements in the marketing program are effective if the brand name is meaningful to the buyer and if the product benefits can be effectively communicated through mass media. Push elements are needed in a marketing strategy if the way the product is presented at the point of sale is important like sales clerk's recommendations are meaningful to buyers and if buyers count on resellers after sale-service.
Advertising strategy: Cowell (2001) argued that mass market consumer advertising should be conceived as discourse of persuasion and rhetorical. Like other rhetorical discourses of action, purpose of advertising discourses aims to create a common view point or desired action among audience (Cowell, 2001, p796). An advertising strategy refers to different types of different types of decisions in the planning of advertising process. According to Shimp (2000) an advertising strategy is composed of five elements: key fact, primary marketing problem, communication objective, creative message strategy and mandatory corporate requirements. The second perspective of advertising strategy refers to creative message strategy guiding message developments & appeals with creative execution. As the planning of an advertising strategy needs to match advertisers overall marketing and communications objective, an advertising strategy for mobile operators at the beginning of diffusion state needs to create maximum adoption rate and to battle for wider subscriber base. To plan an affective advertising strategy, advertisers need to have an understanding of marketing and communications objective (Shimp 2000).
Consumer behavior: Today customers are highly educated, more specialized, living longer and more influenced by global culture than those of 60s and 70s when our view of marketing was formed (Wilson, Daniel & Mc Donald 2002). Therefore understanding customers is now much harder. Many forces are working together to increase the complexity of customer relationships (Thearling K 2000). Consumers should be satisfied while consuming a particular product other wise they will switch to another product with similar features, satisfying the consumer is an essential element in competitive economies. This consumer satisfaction refers to the brand loyalty (Dick, Alan S. and Kunal Basu 1994), which is key tool in attracting the new customers in a particular market. Furthermore, timely, rightly and easy availability of offered product is also crucial thing. Availabilities refer to different terminologies namely form utility, time utility, place utility and possession utility (Peter, Olson & Grunert 1999). Time and place utility are of relevant importance for our consumer analysis. Time utility refers to availability of product when consumers want it, Ease to product reach leads consumer in a comfortable position. It will increase the re-purchase of the particular product in future. Place utility refers to easy access to product, Means of reaching out to products are not so developed in developing markets and market share can be easily lost if consumer has to struggle to find the place to buy the particular product.
Marketing cycle time: The attention span of customer has decreased dramatically and loyalty is a thing of the past. A successful company needs to reinforce the value it provides to its customers on a continuous basis. In addition to the time between a new desire and time taken to meet the desire is also shrinking. If you don't react quickly, the customer will find someone who will serve his needs (Thearling 2000).
Increased marketing costs: Everything costs more, printing, postage, special offers and if you don't provide the special offer then your competitor will (Thearling K 2000).
Streams of new product offerings: Customers want things that meet their exact needs not things that sort of fit. This means the number of products and the number of ways they are offered have risen significantly (Thearling k 2000).
Niche competitors: Existing best customers also look good to competitors. They will focus on small, profitable segments of your market and try to keep the best for themselves (Thearling k 2000).
To have best marketing strategies applied for a product or a service it is very essential to know more about its competitors marketing strategies.
Competitors analysis: According to grant (2005) an important phase in competitor`s analysis is competitor intelligence, that assists a great deal in understanding competitors regarding their strategic moves and reactions to change in external environment in targeted sector (telecom). Therefore, a crucial aspect of a targeted sector (telecom) analysis is the competitor analysis conducted for every competitor separately. The model for analyzing competitors introduced by Grant (2005) consists of four steps and leads to the important moves a firm can make for understanding the competitor behavior in the industry. These four steps are namely:
Competitor's current strategies: A group following the same strategy in a given targeted market is called strategic group (kotler 2000), this strategic group can be defined as competitors in a given market. the success of any business operation depends on keeping a close eye on competitor`s activities, and far more important is understanding their current moves and strategies, As this assist company to determine its own strategic position. the best strategy for an organization to gather knowledge about its competitor`s moves is to communication with its surrounding environment
Competitor's objectives: When an organization knows its competitors and their strategic stance, then its time to discover the fact what they are looking for in a given market. There are lot of factors which shape competitor`s objectives namely: expansion plans, size, history, current management and financial position (kotler 1999). A company can strengthen its competitive stance and gain sustainable competitive advantage by having comprehensive knowledge of competitor's goals and objectives. Strategic analysis of competitor`s, leverages the company`s ability to predict the future moves of competitors and industry trends. This objective analysis can be conducted from product, financial and technological point of view.
Competitor's assumptions: The most common assumptions a competitor assume are efficiency and effectiveness of its business operations and industry within which they operate. These assumptions lead to key 24 success factors for a competitor. These assumptions or believes, which are perceived as determinants for success in a particular industry are termed as “industry recipes” by (J.C. Spender 1989).
Competitor's resources and capabilities: The most crucial and important phase in competitor`s analysis is assessing competitor`s resources and capabilities. Analytical knowledge about these resources and capabilities will lead a company to gain a competitive advantage in a competitive market. Resources include technological, human, financial and strategic resources. Effective utilization of these resources and abundant availability will lead a company to be in a dominant position in a given market. A Comprehensive SWOT analysis should be conducted for each competitor operating.
Marketing mix is widely accepted to be a use of four P's indicating the strategic positioning of a product or service in a market place. It is to achieve firm's objectives by using the tools which are controllable and tactical. According to Mc Carthy (1960) who proposed a 4 P classification explained the four Ps concepts as
Product: A tangible item or an intangible service which is mass produced or manufactured on large scale with specific volume. Service is intangible in nature based upon the industry like mobile phone industry.
Price: It is the value a customer pays for a particular product or service which is determined by many factors like competition, manufacturing costs, market share and an individual's perception towards it.
Place: It specifies a location suitable for launching the product or service, depending on the needs & wants accordingly. It could be at store or virtual on the internet.
Promotion: It indicates all the communication released by a marketer in many methods at a particular market place. It has four major elements such as advertising, word of mouth, point of sale and public relations. In this advertising is used as a mode of communication through paid form and publicity as free unpaid communication.
Maximizing the marketing mix is the major responsibility of marketing. To offer a perfect product or service with the combination of four Ps a marketing person can do to have an optimum marketing effectiveness.
How ever in view of aims & objectives of this research there are 3 main criteria, sales strategy, segmentation & targeting and customer relationship management.
3.3 Sales strategy
Sales strategy is a plan to identify and approach certain set of customers who in turn become the base for the firm bringing in revenue generation and then reaching a target or goal planned by the firm to make profits and have a competitive advantage. According to Porter (1984) the generic strategy framework comprises of two alternatives with its individual scopes. They are low cost leadership and differentiation each having a dimension of Focus which might be either broad or narrow.
Simply understanding the market is not enough there should a proper plan should be built to capture a better market share. Implementing plans to reap profits is the ultimate goal of a sales manager, a good sales strategy will help in identifying and taking advantage of better opportunities available. There should be a clarity in the sales objectives, deciding how to reach capture the target customers, complete planning to support sales, effective monitoring to improve sales step by step. Sales strategy should always be based on the marketing plans, delivering marketing objectives to target market segments. Understanding the market is very essential like what knowing more about the target customers, their expectations of service levels. Try generating business with new prospects, by identifying them who are similar to your existing ones and create appropriate strategy to reach him. Develop more business with existing customers, try cross selling. Keeping the customers happy with better service strategy after sales and building up relationship, obtaining feedback as well to improve the business. Building up a mix of customers will help in safeguarding the sales revenue, balance the time pent developing new business and time spent to keep the customers who already exist with the firm happier. Advertise your product or service to get recognized by providing promotional material to intermediaries. Always keep the sales employees happy and working with them can bring in good results, forecasting might be possible as well. Coordination of sales with other activities like production is essential for planning. Sales team should always be updated about the competitive advantages and make sure that they explain and communicate well to the customers. There should be a constant monitoring of trends in the market such as activities of competitors, changes in customers tastes, developments in technology. Ranking customers according to the profitability order who are existing and prospects as well. Use well established sales channels to reach the target customers, which will be more effective. Planning of recruiting suitable sales team is very much essential to have a better sales growth as it depends on the market size. Sales cost should always be proportional to the expected returns & annual budget should be made for expenditures, wages, etc and reviewing it quarterly is necessary, compare sales achieved with sales budget allocated. These few steps will help for a better sales strategy in a firm to make a position in a particular market.
Sales promotion: Activities, materials, devices, and techniques used to supplement the advertising and marketing efforts and help coordinate the advertising with the personal selling effort, special displays, coupons, promotional discounts, contests, and gift offers (Wilmshurst 2002). Consumer promotions might include:
* Special price sales
* Free sample distribution
* Premium offers
* Point of sale demonstrations
* Coupon offers
* Combination or branded pack product offers.
Sales promotion is often tactical as it creates an impression about the company so the promotion activity should be well organized and implemented. To a large extent, advertising is used strategically as a part of continuing attack on the marketplace often with long term objectives in view and advertising the services efficiently attracts the customer who is in need of that service facility. To create a brand image, to generate a flow of enquiries, to influence a whole new market favorably towards a product, calls for carefully planned advertising over a long period. Even short term results are expected as in direct sales advertising, this response will usually need to be on a frequent repeated basis, so that the advertising must be continuous (Wilmshurst 2002).
Understanding price as a concept: price is the monetary value assigned by the seller to something purchased, sold or offered for sale, and on transaction by a buyer, as their willingness to pay for the benefits of the product and channel service delivery. Price plays a crucial role in targeting and obtaining customers it is segmentation process where a group of people are satisfied with the product or service. Understanding the way price affects demand or how demand operates between price points is an important consideration for setting of price policy (Gilbert 2002). The most important recurring themes within the cross-cultural marketing are the standardization of advertising. Advertisers should have three choices, standardization, adaptation and contingency approach (Burton 2008).brand image of a company product or service can be created through marketing its benefits and facilities. Once a brand image in created in the minds of customer's then they stick to it and they become the supporters of that brand. A brand should be more than a logo. The tactical brand isn't about touching or feeling things in traditional sense. It's in the way reaching out their expectations (Raymond 2003).
Brand building: from product to value. It takes time to build really strong brand. There are two routes, two models for doing so, from product advantage to intangible values or from values to product (Kaferer 2008).
3.4 Market segmentation & Targeting strategy:
Market segmenting is dividing market into groups who have specific wants that a company can distinct and sell its products or services to them. The process of segmentation is done to target certain set of customers based upon priority using specific marketing ideas for those customers only to improve business for higher revenue generation. Improved segmentation can lead to marketing effectiveness & distinct segments can have different structures thus having a lower or higher attractiveness. Segmentation is mainly used by firms to retain its most profitable customers and ensuring a successful business. It is usually impossible for a firm to cover demands and needs of the entire market and thus segmentation is required. (Kotler, 2003, p. 279) Segmentation allows firms to focus on specific target markets. In this way, the firm could tailor its offer to the specific needs and demands of those segments. (Kotler, 2003, p. 9) With the 3G transition, the large number of services will increase the importance of focus and segmentation (Khesal, 2005). Markets can be delineated in terms of segments. A market segment is a set of potential customers alike in the way they perceive the value of the product, in their buying behavior, and in the way they use the product. Defining relevant market segment is the first step in product / market selection. It creates for a framework for developing market strategy. Market can be segmented along various dimensions:
Demography: This segmentation relies on such factors as family income, age, sex, ethnicity and educational background as explanatory variables for differences in taste, buying behavior and consumption patterns.
Geography: This segmentation framework is useful in both consumer and industrial markets. Different areas of the country and different parts of the world may vary significantly in terms of market potential, competitive advantage, product preferences and government trade regulations.
The increasing globalization of markets, geographic segmentation variables have declined somewhat in importance versus others. Product uses and preferences and buying behavior across the world are coming to exhibit greater commonality. Advances in communication and transportation have also eased geographic market limits.
Psychographic variables: psychographic typologies attempt to segment markets according to individual lifestyles and attitudes towards self, work, home, family and peer group identity. For example senior citizens or baby boomer generation and teenagers in their needs for products and services, political persuasions, residential preferences thus compromise distinct high potential market segment. People of different ethnic origin exhibit significant differences in product wants and responsiveness to different buying influences as to compromise different market segments.
It is important to recognize that the market segmentation scheme appropriate at one stage in the development of a market may become obsolete with the market growth and maturation. Customers become educated in buying, evaluating, using the product. Demand increases then new competitors enter thus new product forms are introduced with emergence of new distribution channels. Such events change the way people buy and lead to much more elaborated market segmentation structures. Not o continually revisit the task of segmentation delineation and look for new market opportunities is to loose touch with the market risking significant loss in competitive position. The purpose of marketing segmentation is to delineate groups of potential buyers according to their needs, market potential and buying behavior. In the context of a firm's overall strategy some segments may be defined demographically, some geographically some in terms of lifestyle and corporate culture and some in accordance with product application. Some may be defined as subsets of other variables. Having developed a segmentation scheme, strategic planners may select from among these those markets the firm may serve most creatively and profitably and to develop strategies for each.
Product / Market selection criteria:
In making product / market choices, a number of factors must be considered:
Product value: first and most important, market entry and development efforts must focus on those segments that value the product most highly. Target those applications in which the product or service makes its greatest contribution. If markets are veins of latent demand, marketing resources are best spent on digging where the dirt is softest which means where the product is most highly valued.
Long run growth potential: ultimately the market size and profit potential is the key. Growth potential estimates should factor in any follow on market opportunities as well as the one at hand. New technology often moves rapidly from one application to another and early market entrants may ride the wave of technological progress in development of new applications.
Resource commitments: product / market choices often commit firms to heavy financial drains not only in marketing costs but also in production facilities and R&D. can the resources be made available to compete in some high potential market, and does the estimated return on assets.
Company - product / market fit: new product / market opportunities need to be assessed in the context of existing business operations. This raises issues such as: will the firm's reputation and brand name be in value? Will the proposed offering enhance the company's position with existing customers and its strength in dealing with its distributors and retail outlets?
The art of pricing: According to Nagle & Holden (1995), the degree of importance attached to a price of the product by the management depends on the extent to which firm seeks competitive advantage by offering its customers a less expensive product for the value being delivered as compared to rivals. Price is generally one of the main competitive areas in the mobile communications industry (Khesal, 2005). A fair price consists of appropriate investment, operating costs and modest return on the investment (Smura 2003). The prices of products and services are determined by the interplay of five factors:
Supply / demand conditions: the extent of supply relative to demand for a product or service is the basic determinant of price. Greater the supply of a good the lower is the price. In general basic levels of supply and demand are beyond the control of individual players but the major players will try to influence total supply relative to demand. They may seek to limit market demand through lobbying government for trade restrictions such as imposing high tariffs on particular product.
The firm's production and overhead costs or Cost Factors: In pricing, costs set the floor. A supplier cannot sell below the costs of making and marketing a product and still stay in business. But what should be counted as cost for strategic purposes will depend largely on the firm's pricing objectives. A relative levels of fixed and variable costs also affect pricing strategy. If such fixed costs as depreciation, R&D, sales and advertising costs are high relative to variable costs then maximizing sales volume becomes more important strategic objective in order to spread fixed charges over as many units as possible.
Competition: If cost factors ultimately set the floor for prices, competition establishes the ceiling. The competitiveness varies by geographic area and often by stages of market development. Firms may legally respond to competitive price pressures in three ways: by differentiating their products, attempting to dampen intra-brand competition among their resellers and exercising price leadership. The mantle of price leadership typically falls on the industry's largest firm respecting its leading edge technology, strong distribution and low production costs. Price leaders seek to set price levels in response to changes in supply and demand, product cost factors, and perhaps the intensification of competition. An announced price increase may fail to stick as smaller competitors chip away at industry price levels to gain market share. Pricing in an industry is usually characterized by conscious parallelism, following the moves of the market leader to maintain uniform prices across the market. As long as competitors do not communicate with each other directly and pricing moves cannot be construed as predatory intending