Marketing Fundamentals Analysis - Term Paper Example

Contents Introduction 2 Introduction to the Case Study Organisation 2 Segmentation - Identification of Potential Target Segments 2 Market Segmentation for 3G 3 Targeting - Selection of Target Market 5 Targeting for 3G 5 Positioning - How Customers See the Offerings 6 Positioning for 3G 7 References 9 Introduction Marketing is one of the most important elements of any business strategy. Without a properly thought out marketing strategy, it is difficult to succeed in any market, however good the product or service offering may be. There are three main activities to be carried out before developing marketing strategies. These include segmentation, targeting and positioning of the product/ service. This paper provides an overview of the major tasks involved in these areas using a real life example. Introduction to the Case Study Organisation The organisation chosen for the case study is Hutchison Whampoa Limited - 3G mobile service UK. Hutchison Whampoa Limited is an international corporation having many diversified businesses including port operations, retail, property development and infrastructure, technology, and telecommunication operations. 3G Mobile Services is a mobile media company that operates from United Kingdom. The main businesses include communications, media and entertainment and information services (Hutchison 3G UK Limited, 2008). Segmentation - Identification of Potential Target Segments It is critical that target market for company's products and services is identified and analyzed. The target market where the company will operate and the customers to target pose significant insights into the demographics, market structure and other parameters. A proper research can provide credible results that can then be used to develop positioning and targeting strategies. The main purposes of carrying out market segmentation include the following: Product Development Companies can access the market and capitalise on the endless opportunities only if these companies can understand the exact requirements of the target customers and modify their products and services accordingly. Pricing In addition to product and services development, the companies need to decide on the pricing of their products and services. The right price may spur the sales but too high or too low a price will definitely affect the company negatively. Pricing is a critical decision and hence can only be taken if exact market information is available. This decision has far reaching effects. Market is segmented based upon demographic factors like age, preferences, gender, and other factors related to potential customers; geographic factors like location, climate, population, etc; psychographic factors like attitude, lifestyle and values; and/ or behavioral factors like usage rate, brand loyalty, etc (Eztel Walker Stanton, 2003). Market Segmentation for 3G 3G has chosen United Kingdom as its primary target market based on its specific geographic factors like high population density, and relatively better law and order conditions, etc. This is also because of 3G's expertise and experience to operate in this region and the huge inroads that the company is able to create inside the big UK market for mobile communications. Being a mobile media company, it is critical for 3G to develop its products and services with specific focus on the UK's customer requirements. Based on the analysis carried out by 3G, the company identified various segments of mobile phone service market in UK. Some of these market segments that 3G identified during their market segmentation research are discussed in the following sections. With the advent of modern technology, only a small segment in the target market wants to use mobile phones for making and receiving phone calls only. They prefer various other features with their mobile phones. These factors are all based on the demographic, behavioral and psychographic factors that were considered by 3G during the research for market segmentation: Video Calls Many users (especially in the 15 - 40 years range) prefer video calls instead of just voice calling Interactive Multimedia Most users in the same age range like to listen to music, play interactive games and carry out online activities using the internet on their mobile phones Weather and News The weather and news services are required by businessmen, sports fan, and general users on their mobile phones M-Commerce There is a niche market segment for business users who are mostly in travel. These people prefer to make financial transactions on the fly using their mobile phones instead of using computer for the same purpose. Targeting - Selection of Target Market Once the market was segmented based on the factors described above, 3G carried out the targeting activities. This included identification of the potential market that will be targeted by the company for selling its products and services. Targeting for 3G Since 3G is a big player in UK market and has the resources to target various markets simultaneously; hence, the company decided to target all the identified segments in the market. Hence, the targeting strategy selected by 3G for its services is that of Mass Marketing. Using this approach, 3G has created the same line of service for all potential customers in the market. Hence, following services are offered (Hutchison Whampoa Limited, 2003): 3G has introduced Person to Person Video Calls facility for their users. Now, a 3G can see the caller/ receiver while talking to him. This gives more personalized touch to the mobile communication. Entertainment - The Company offers interactive music, postcards, interactive games and online ticket booking facilities to its customers. This range of services is provided at a fee; hence those segments of market customers who like to use these services have to pay just a nominal fee. News and Information - Weather and sport news is provided, usually free of cost, to the customers. Business and M-Commerce - Realising the needs of the business users and frequent travelers, 3G has created a new line of service built into the existing service infrastructure. Using 'electronic wallet' concept that 3G has pioneered, customers can make financial transactions using their mobile phones. Global Positioning - 3G mobiles are equipped with global positioning for field navigation and other purposes. These and other similar services provide a comprehensive coverage of the needs and requirements of various identified segments in the target market for the company. In addition, it provides the customers with the choice to try out a new technology and thus, a customer who is not used to a new technology, for example, m-commerce, can try it out using the 3G's systems. The customer might like it and become a permanent customer for the new service. Thus this mass marketing approach has its own advantages for the company. Positioning - How Customers See the Offerings Positioning refers to the way a company wants its customers to see itself. It includes a set of policies and strategies that a company adopts to identify itself in the target market - a unique identification or a 'me too' approach. Positioning is the way the potential customers see the products and services offered by a company (Kotler, 2003). Positioning for 3G The positioning strategy opted by 3G is predominantly that of differentiation from all other providers of mobile services. The company wants its customers to see it as the best provider of mobile phone services in the country. 3G has enhanced its products and services a great deal since its inception. There are a number of value added products and services that the company provides. These include, but are not limited to television and radio broadcasts on mobiles, in addition to providing internet and web surfing features. Different packages have been developed for customers in various categories for ease of use, economy and optimal gains. These product development and management policies are working well for 3G and providing huge dividends to company and its management. The company has offered some of the thinnest mobile phones in industry including Motorolla V3 Razor and LG U880 which is the first handset with integrated antenna by LG. In addition, the company offers some of the most demanded packages for mobile use at the cheapest rates. This includes 'Pay Monthly' package which cost only 20 per month and the company a free Nokia 6500 Classic Black mobile phone along with 100 text messages and 100 minutes (Hutchison 3G UK Limited, 2008). 3G offers 24 hours customer support and help both through telephone and internet. This is provided to give quick responses to customers' queries with utmost care and responsibility. The employees at the company are trained to provide customer centric services by developing a customer oriented culture in the company. In addition to the above, companies adopt product bundling prices for its bundled products. For example, in case of 3G, the company provides bundled products by selling mobile phones with internet service, free news and live messenger support. 3G, in return, is compensated due to high demand and customer preferences for such bundled services. A customer who purchases a mobile from 3G can enjoy all other bundled benefits in one package. Another pricing tactic used by 3G is a two part pricing for its mobiles. This is when 3G charges a fixed line rent for 'Pay as You Go' service and charges 3p per minute for outgoing calls (Hutchison 3G UK Limited, 2008). References Eztel, J. M., Walker, J. B., Stanton, J. W. Marketing. 13th Edition. Ohio: McGraw Hill, 2003. Hutchison Whampoa Limited. (2003). H3G: What is 3G. Available from: [Accessed 4 March 2008]. Hutchison 3G UK Limited. (2008). 3 - Company Site: Introducing 3. Available from: [Accessed 5 March 2008]. Hutchison 3G UK Limited. (2008). 3 Store. Available from: [Accessed 5 March 2008]. Hutchison 3G UK Limited. (2008). 3 - Pay As You Go. Available from: [Accessed 5 March 2008]. Kotler, P. Marketing Management. 11th Edition. New Jersey: Prentice Hall, 2003. Read More