SUNDAY communication - Essay Example

? Consultancy Proposal Introduction First of all, the researcher wants to express gratitude to SUNDAY Communications Ltd for giving opportunity to prepare consultancy proposal for the client. So, what is the agenda? To be precise, main agenda for preparing the proposal is to help SUNDAY Communications Ltd to address the problems they are facing and provide consulting support to the company so that it can market driven achieve their goals and objectives. Before going to the main discussion the study will define the background and business context of the problems faced by to SUNDAY Communications Ltd in recent times in order to provide logical background of this consultancy proposal. Background Information & Literature Review Choi, Lee and Wong (2001) presented the case study named as “Sunday communications ltd: A marketing strategy for the wireless future” in order to highlight existing challenges faced by the telecommunication company and challenges regarding future plan of the company. In such context, consideration of the research works of Langlois (2003) reveals the fact that it is very difficult to establish identifiable position in a small market place which is pretty much saturated due to presence of competitors. Same is the condition for Sunday communications ltd which was founded in the year 1994 when the Hong Kong telecom market was already dominated by large telecom players like PCCW-HKT, SmarTone Telecommunication Holdings Ltd, Hutchison Telecom (HK) Ltd, New World Telephone and Peoples Phone. There is no doubt that Sunday communications ltd was new entrant and none of existing competitors was ready to give free space to the new entrant. Garbarino and Strahilevitz (2004) and Harris, Jenkins and Glaser (2006) stated that new entrants need to adopt product differentiation strategy in order to establish distinctive brand image in the mind of customers of a small saturated market. Kotler (2000) pointed out that marketers should increase engagement level of customers while offering low engagement products because customers do no spend much time in making purchase decision for low involvement products like telecom network connections, FMCG goods. Therefore, Sunday communications ltd had two challenges, 1- to establish distinctive brand positioning in the mind of customers of Hong Kong and 2- to compete with existing telecom players in the market with the help of product diversification. Competitive pressure on Sunday communications ltd has further increased after Office of the Telecommunications Authority (OFTA) launched Mobile Number Portability (MNP) during 1999. After launching MNP, existing six telecom operators in Hong Kong started competing on price because in newly launched system, subscribers can switch to other network provider without altering the mobile number. Competitors like PCCW-HKT, SmarTone Telecommunication Holdings Ltd, Hutchison Telecom (HK) Ltd, New World Telephone and Peoples Phone not only stopped in reducing the subscription price to attract customers but they even started offering handsets at minimal price to customers. There is story behind the brand name “Sunday” which was created by the company in order to portray relaxed and easygoing attitude. Another thing is that the company had the plan to launch the brand internationally therefore they thought that using a universal name would help global customers to connect easily (Choi, Lee and Wong, 2001). Sunday communications ltd used product diversification strategy in order to establish distinctive market positioning. Global System for Mobile Communications (GSM) service (through mobile Intelligent Network) was speciality of the company while Sunday communications ltd also started offering services like Wireless Application Protocol (WAP), IDD, ISP & portal etc to customers. The company also used aggressive pricing strategy like 24-hour flat subscription rate in order to win the completion. Even, Sunday communications ltd launched SO WAP and ISP (narrow-band dial-up service) which gave users opportunity to access online utility services through the phone. Product services of the company also included entertainment facilities like Mobile Cupid, Mobile Ju, dating service etc (Choi, Lee and Wong, 2001). SUNDAY used retail shop based distribution channel where central location of the Sunday telecom subscription offering retail stores helped the company to access larger customer base. On the other hand, the company also used direct sales channel in order to offer telecom subscription services to customers. Sunday communications ltd used penetration pricing in order to gain access to Hong Kong telecom sector. For example, subscribers of Sunday communications ltd could avail unlimited airtime by paying HK$88 per month which was lowest at that time. Although, Sunday tried to target customers in all the age group but penetration of the company was pretty less among the teenage and young customers (age group of 12 years to 20 years). The company even broadcasted number of advertisements and promotional activities in order to generate brand awareness among customers and some of the advertisement of the company even got awards. Despite such holistic marketing strategies, Sunday communications ltd had never been successful in becoming serious competitive threat for others telecom players like PCCW-HKT, SmarTone Telecommunication Holdings Ltd, Hutchison Telecom (HK) Ltd. For example, after the introduction of Mobile Number Portability (MNP), every other competitor started giving subsidies or free handsets in order to attract customers but Sunday was late entrant in such kind of initiatives. As a result, despite investing $284.9 million in promotional campaign, Sunday communications ltd failed to gain market share. During 1999, the company scaled down handset subsidy and discount programmes then customer churn rate for the company increased to almost 6% which is showing the volatility of the market (Choi, Lee and Wong, 2001). In such context, Sunday decided to use wireless internet services and 3G as the future of their product offering and the company planned to acquire 3G license in order to become competitive force when it comes to regional wireless communications services in Hong Kong. Sunday communications ltd is a small company in terms of resources as compared to Hutchison Telecom (HK) Ltd and PCCW-HKT while getting 3G license is a cost intensive process. Therefore, the company has hired the consultancy team to help them to decide their wireless communication strategy backed by 3G license or Mobile Virtual Network Operator (MVNO) status acquisition. However, the company had the plan to expand its business to countries like China, Malaysia, Taiwan, India but this plan of the company would not be focus of this consultancy project (Choi, Lee and Wong, 2001). During the time period mentioned in the case study, Hutchison Telecom and SmarTone Telecommunications already Macau wireless 3G licences but Sunday communications ltd failed to attract government support to avail 3G licenses. Therefore, pertinent objectives for this consultancy proposal can be briefed in the following manner; To provide strategic consulting support to Sunday Communications Limited to decide its wireless communication strategy. To help the client to increase market share in Hong Kong communication market. Following model can be used to defined strategic position of Sunday Communications Limited. Figure 1: Strategic Choice for Sunday Communications Limited (Source: Hassan and Craft, 2012, p. 351) The company has decided to use global brand image while the primary phase, they had the plan to acquire 3G licences to penetrate in wireless communication strategy. Therefore, density of scatter diagram is high for following a global strategy for Sunday Communications Limited. Offering of Sunday had hardly any difference with competitors offering therefore focused strategy would not work for the company (Hassan and Craft, 2005). Let us try to understand the market condition of telecom network service sector in Hong Kong. Figure 2: Mobile Phone Subscriber in Hong Kong during operational period of Sunday Communications Limited (Source: Choi, Lee and Wong, 2001) [Note: At present, there is no existence Sunday Communications Limited because the company has been acquired by PCCW in 2005. Therefore, the study will only use data of the operational time period of Sunday Communications Limited]. It is evident from the above figure that more or less 3 million mobile phone service subscribers are there in Hong Kong. Table 1: Market Share and Customer Base of Telecom Service Providers in Hong Kong Telecom Players Market Share Probable Customer Base PCCW-HKT, SmarTone Telecommunication Holdings Ltd, Hutchison Telecom (HK) Ltd. 80% 0.8*3 million= 2.4 million New World Telephone and Peoples Phone and Sunday Communications Limited 20% 0.2*3million= 0.6 million (Source: Choi, Lee and Wong, 2001) Therefore, during the operational period, Sunday Communications Limited had less than 10% market share and it is logical to thing that they would go for aggressive marketing strategy in order to go for establishing strong market positioning. Considering the research works of Pierce and Mouskanas (2002) and Souiden, Kassim and Hong (2006) reveals the fact that in competitive market place companies need to establish individual brand name in order to achieve break even. Although, Laforet (2011) and Berry (2000) conducted research on FMCG sector but research findings of these scholars can be used by Sunday Communications Limited in order to understand the significance of establishing strong brand name. Rahman and Areni (2009 and 2010) and Anisimova (2007) stated that diversifying the product portfolio should match with the corporate brand image of the company which means that Sunday Communications Limited needs to synchronize their “easy going” brand image with product offering in order to penetrate in the market. Now, fact is that Sunday decided to use wireless internet services and 3G as the future of their product offering and the company planned to acquire 3G license. Let us check the market potential of wireless internet connection through mobile network subscription. Figure 3: Market Volume for Wireless 3G Network (Source: Choi, Lee and Wong, 2001) At that time, Sunday Communications Limited was eying to expand wireless communication business in Malaysia, India, China, Thailand and Hong Kong while these markets have growth potential of 160 million internet user. Hence, Sunday had the opportunity to cash on growing market demand for wireless internet services in mobile. Ozsomer and Prussia (2000), Schuiling and Kapferer (2004) and Aurifeille et al. (2002) suggested that companies need to decide market segments before deciding marketing strategy. On the other hand, Steenkamp and Hofstede (2002), Cova, Pace and Park (2007) and Hung, Gu and Yim (2007) argued that small companies need to segregate their local market in context to macro environmental indicators. Considering arguments of these research scholars, it can be said that Sunday Communications Limited should divide its market in context to geo-demographic characteristics before moving to decide marketing strategy. However, none of this research scholars ever tried to define how small brand like Sunday or may be others can gain market penetration by adopting technology integration. Therefore, there is gap in literature review regarding competitive advantage of small companies trying to adopt new technological means to achieve business success. Such gaps in the literature have forced the consultant to take on this study to mitigate the gap and help Sunday Communications Limited to address its existing problems. Research Objectives Elaborated research objectives can be described in the following manner. 1. Broad Objective Broad objective of this report will be to help SUNDAY Communications Ltd to decide 3G license acquisition and wireless communication strategy which can help them to compete with market leaders without negatively affecting top line or bottom line growth of the company. It has been evident from the above discussion that till date, SUNDAY Communications Ltd has not been successful in achieving market share in Hong Kong communication market. Although, the SUNDAY Communications Ltd has created awareness among customers through promotional activities but the company has not been able to create loyal customer base. Therefore, aim of the consultancy project will be to help SUNDAY Communications Ltd to gain market share and generate a higher level of brand loyalty among customers. 2. Specific Objective In short, there will be two specific objectives of this consultancy report such as, 1- providing strategic consultancy support to SUNDAY Communications Ltd for developing their marketing and operational strategy regarding 3G license acquisition and wireless communication, 2- helping SUNDAY Communications Ltd to develop marketing and operational strategy which can help them to not only gain market share but also generate brand loyalty among customers. Methodology Saunders, Lewis and Thornhil (2007 and 2009) stated that researchers can use three types of research philosophies such as phenomenology, realism and positivism. Phenomenology and realism research philosophies are being used in order to understand social problems, human perceptions or research problems regarding cognitive aspects but at present case, the problem is more of business and marketing strategy related. Therefore, the consultancy team will use positivist approach to find root cause of the problems facing by Sunday Communications Limited in measurable manner. Creswell (2009) and Gray (2009) stated that researchers can use deductive or inductive approach to conduct the research. In case of deductive approach, researchers validate the assumptions by testing the relationship between variables while in case of inductive approach, researchers try to establish new theories by doing the research. As the objective of the paper is not to establish any new theory rather helps the client with feasible solutions therefore deductive research approaches will be used. On the other hand, the consultancy team will use mixed approach (mix of qualitative and quantitative methodology) to do the research (Bryman and Bell, 2003 and Curwin and Slater, 2008). As part of qualitative research strategy, the researcher will analyze historical data, year on year financial statements of Sunday Communications Limited and its competitors, governments releases regarding 3G license auctioning, industry reports, reports regarding previous outcomes of 3G licenses for small telecom player in other countries, case studies and also academic literature etc to understand the whole scenario. On the other hand, as part of quantitative research, the consultancy team will use primary survey of mobile subscribers in Hong Kong and interview of key government & industry people in order to address the problem in definitive manner. It is evident from the discussion that using mixed model would help the consultancy team to approach the problem in comprehensive manner covering all the aspects while banking only on one research strategy (qualitative or quantitative) might not help the consultancy team to cover all the aspects of the research problem. Focus group interview will be used Hong Kong government officials who are handling 3G licensing issue while individual interview will be used for collecting opinion from telecom industry analysts who can help in understanding the future of 3G license auctioning and wireless network communication. Open ended questionnaire will be used for the interview purposes and techniques like CAPI (Computer-assisted personal interviewing), CATI (Computer-assisted telephones interviewing) and CAWI (Computer Aided Web Interviewing) will be used to conduct the focused group and ethnographic interview (Robson, 2011). On the other hand, a sample questionnaire will be designed (complemented with 15 to 20 close ended questions, multiple choice questions, likert scale questions, dichotomous questions) in order to conduct the survey process. Simple random sampling technique will be used as part of probabilistic sampling in order to select sample size for close ended questionnaire survey. Local retailers who sell mobile subscription connection will be approached to access customer data and then from customer data, sample population will be drawn. Telephonic interview and e-mail based questionnaire survey will be used as data collection technique (Davies, 2007). Using simple random sampling will help the consultancy to assign equal probability to each respondent for getting selected in the survey method and such approach will reduce the magnitude of errors caused due to chance factors. Ethical issues regarding disclosing identity of respondents, biasness, hurting sentiment of respondents may arise during the research process. In order to address these ethical issues, name and identity of respondents in the sample survey will not be revealed in the research process and prior approval of the respondents will be taken before conducting the interview. The research team will not use any phrases in the questionnaire that may hurt the values, religion belief of the respondents. Expected output and Marketing ROI Expected outcome or benefits of the consultancy support can be defined by using SMART (Specific, Measurable, Achievable, Realistic and Time bound. Table 2: SMART Outcomes Specific To help SUNDAY Communications Ltd to decide their wireless communication marketing strategy. Measurable The consultancy report will help client to gain at least 15% of market share in the field of wireless communication sector. Achievable Financial position of the client is improving and therefore, it is expected that the client will achieve 15% market share in wireless communication sector within 15 years. Realistic The client has already more or less 5% market share hence it will not be problem for them to achieve 15% of market share by deploying all their resources. Time Bound 12 months to 18 months have selected to optimize and implement strategic recommendations and developing marketing strategy for the client to penetrate in Hong Kong wireless communication sector. Table 3: Expected Marketing ROI (in HKS'000) Year 1 Year 2 Year 3 Investment 300,000 400,000 500,000 Market Research 50,000 50,000 N/A Marketing Communications (including distribution channel cost) 150,000 200,000 300,000 Marketing Budget (including salaries, bonus payment) 100,000 150,000 200,000 Rise in Sales 350,00 450,000 600,000 ROI 16.66% 12.5% 20% Research Timeline Table 4: Time Schedule- Gantt chart Quarters Quarter 1 Quarter 2 & 3 Quarter 4 Activities Identifying the key issues Developing hypothesis and key questions Collecting secondary and Historical data Developing the background literature Developing close ended questionnaire and open ended interview questions Primary data collection Compiling and analyzing the primary data by using statistical and non-statistical tools Preparing a draft report Revising draft report as per client requirements Submitting the consultancy report and presentation to client Contingency and Risk Management Following problems can arise during the research process and these issues can be addressed in the following manner. Table 5: Risk Management Problems Corrective Measures Duration of the project may increase due to occurrence of uncertain events. Critical Path Method (CPM) will be used in order to control the time limit of the project. Additional fund may be required during mid of the project. 10% capital buffer will be used to finance additional fund requirements. Client may change the project deliverables during mid of the project. Working closely with client and negotiation can be used to avoid such problems. Consultancy's Background and Experience of the Team The consultancy has been established during 1988 and specializes in providing strategic supports in the field marketing, procurement, supply chain vendor management. The consultancy serves requirements of clients from various industries like technology, chemical, FMCG telecommunication etc. Mr. X, Mr. Y and Mr. Z will be the key team members. Mr. X will be the project manager and other two will work as associate. Each of them has more than 15 years of consultancy experience and they have altogether handled more than 60 projects. Mr. X- PhD in economics and have 21 years of consulting experience. Mr. Y- MBA with specialization in marketing and have 17 years of consulting experience. Mr. Z- PhD in strategic management and have 16 years of consulting experience. Reference List Anisimova, T. A., 2007. The effects of corporate brand attributes on attitudinal and behavioural consumer loyalty. Journal of Consumer Marketing, 24(7), pp. 395-405. Aurifeille, J. M., Quester, P. G., Lockshin, L. and Spawton, T., 2002. Global vs international involvement-based segmentation: A cross-national exploratory study. International Marketing Review, 19(4/5), pp. 369-86. Berry, L. L., 2000. Cultivating service brand equity. Journal of Academy of Marketing Sciences, 28(1), pp. 128-37. Bryman, A. and Bell, E., 2003. Business research methods. Oxford: Oxford University Press. Choi, E., Lee, V. and Wong, C., 2001. Sunday communications ltd: A marketing strategy for the wireless future. University of Hong Kong: Asia Case Research Centre. Cova, B., Pace, S. and Park, D. J., 2007. Global brand communities across borders: The Warhammer case. International Marketing Review, 24(3), pp. 313-29. Creswell J. W., 2009. Research design: Qualitative, quantitative, and mixed methods approaches. 3rd ed. California: Sage Publications. Curwin, J. and Slater, R., 2008. Quantitative methods for business decisions. 6th ed. Andover: Cengage Learning EMEA. Davies, M. B., 2007. Doing a successful research project: Using qualitative or quantitative methods. Basingstoke: Palgrave Macmillan. Garbarino, E. and Strahilevitz, M., 2004. Gender differences in the perceived risk of buying online and the effects of receiving a site recommendation. Journal of Business Research, 57, pp. 768-75. Gray, D. E., 2009. Doing Research in the real world. 2nd ed. London: Sage Publications Ltd. Harris, C. R., Jenkins, M. and Glaser, D., 2006. Gender differences in risk assessment: Why do women take fewer risks than men? Judgment and Decision Making, 1(1), pp. 48-63. Hassan, S. and Craft, S., 2005. Linking global market segmentation decisions with strategic positioning options. Journal of Consumer Marketing, 22(2), pp. 81-9. Hassan, S. and Craft, S., 2012. Examining world market segmentation and brand positioning strategies. Journal of Consumer Marketing, 29/5, pp. 344–356. Hung, K. H., Gu, F. F. and Yim, C. K., 2007. A social institutional approach to identifying generation cohorts in China with a comparison with American consumers. Journal of International Business Studies, 38(5), p. 836. Kotler, P., 2000. Marketing management. Sydney: Prentice Hall. Laforet, S., 2011. Brand names on packaging and their impact on purchase preference. Journal of Consumer Behaviour, 10(1), pp. 18-30. Langlois, R. N., 2003. The vanishing hand: the changing dynamics of industrial capitalism. Industrial and Corporate Change, 12, pp. 351-85. Ozsomer, A. and Prussia, G. E., 2000. Competing perspectives in international marketing strategy: Contingency and process models. Journal of International Marketing, 8(1), pp. 27-50. Pierce, A. and Mouskanas, H., 2002. Portfolio power: Harnessing a group of brands to drive profitable growth. Strategy and Leadership, 30(5), pp. 15-21. Rahman, K. and Areni, C. S., 2009. Service brand relationship matrix: Brand strategy for services sector. World Journal of Management, 1(1), pp. 141-52. Rahman, K. and Areni, C. S., 2010. Product line subbranding versus company as the brand in services. The Marketing Review, 10(1), pp. 57-67. Robson, C., 2011. Real world research. 3rd ed. Chichester: John Wiely and Sons Ltd, Publication. Saunders, M., Lewis, P. and Thornhil, A., 2007. Research methods for business students. 3rd ed. New Jersey: Pearson Education. Saunders, M., Lewis, P. and Thornhil, A., 2009. Research methods for business students. 4th ed. New Jersey: Pearson Education. Schuiling, I. and Kapferer, J., 2004. Executive insights: Real differences between local and international brands: strategic implications for international marketers. Journal of International Marketing, 12(4), pp. 97-112. Souiden, N., Kassim, N. M. and Hong, H. J., 2006. The effect of corporate branding dimensions on consumers’ product evaluations - a cross cultural analysis. European Journal of Marketing, 40(7/8), pp. 825-45. Steenkamp, J. E. M. and Hofstede, F., 2002. International market segmentation: Issues and perspectives. International Journal of Research in Marketing, 19(3), pp. 185-213. Appendices Figure 4: Financial Condition of Sunday Communications Limited (Source: Choi, Lee and Wong, 2001) Key Questions in Interview A. Government Officials 1. What is governments take on 3G license auctioning? 2. What are eligibility criterions set by government for qualifying network subscriber to acquire 3G license? 3. How government will provide support to telecom operators who would acquire 3G wireless network licenses? B. Industry Experts 1. Will be a right option for Sunday Communications Limited to acquire 3G license to enter wireless communication sector in Hong Kong? 2. What can be the probable challenges for Sunday Communications Limited to decide wireless communication marketing strategy? 3- How wireless communication can impact competitive environment of telecom sector of Hong Kong? Read More