Perspectives of Launching a Multi-technology Device in Australia - Research Paper Example

This report, which is a part of the Marketing Module of the course curriculum, aims to bring out the learning of the students with respect to new product development process. It includes both primary and secondary research data analysis and decides upon the viability of the new product launch. For secondary research, internet, books and journals were referred. From the secondary research it was found that mobile phones had huge penetration in Australia and people were in the habit of replacing their mobile phones every one to two years (Australian Mobile Telecommunications Association (AMTA), 2008). For the primary data gathering and analysis, a questionnaire was designed and survey conducted. The data gathered from the survey was then analysed. From the analysis it was derived that a mobile phone which includes computing as well and is priced low is the need of the hour, mainly for foreign nationals residing in Australia. To further strengthen this conclusion, industry/ competitor’s analysis and PESTL was also done. The above mentioned analysis also yielded favourable results. The next step was to work on the SWOT of the organization and decide the marketing mix. It is found that organization is strong in technology and pricing but suffers from the lack of a brand image as of now. To overcome this brand positioning was also decided. Main challenge that confronted the students, while preparing this report, was during the primary research phase. Seeking cooperation, from what constituted the sample, and urging them to give correct answers to the questions was time intensive exercise. Nevertheless, it definitely enabled the students to realize the hard ground realities. It gave a feel of what real marketing is like and was definitely an enjoyable experience inspite of all the hardships. After going through the process of new product conceptualization and development, it is realized that launching a multi technology device (MTD) for foreign nationals residing in Australia would be profitable venture. MTD is a combination of mobile phone and computing technologies. As per the forecast on the basis of past trends in the Australian telecom industry at least 35% international students, 30% households and atleast 10% of the 18-65 age bracket people would purchase the MTD. Since SWOT, PESTL, primary research and secondary research all point to the viability of the project, it is recommended to go ahead with the new product concept of launching the mobile phone based on the research undertaken by the students. Table of Contents 1 Introduction 5 2 Environmental Scan 5 2.1 Organisation 6 2.1.1 S.W.O.T. Analysis 6 2.2 Competitors/Industry 7 2.3 P.E.S.T.L 8 2.4 Primary Research 10 3 New Product Concept 10 4 Segmentation, Target Market Positioning 10 5 Marketing Goal 12 6 Marketing Mix 13 6.1 Product 13 6.2 Place (Distribution) 15 6.3 Promotion 16 6.4 Price 18 7 Recommendation 18 1 Introduction The report presented here is a work of marketing whereby the feasibility of a new product introduction in the telecom industry of Australia is discussed. The report discusses the feasibility from various stakeholders’ angles such as the manufacturer, consumers, legal, environment etc. The organization under discussion is Mini Oral 2 which is intending to launch a Multi technology Device- MTD- as a dual purpose handset in Australia. It would act both as mobile phone and computing device. The concept revolves around empowering the end-user with multiple technologies at the best price possible. 2 Environmental Scan Environmental Scan is defined as, ‘the acquisition and use of information about events, trends, and relationships in an organization's external environment, the knowledge of which would assist management in planning the organization's future course of action’ (Aguilar, 1967). Environmental scanning may include macro environment, industry, competitor analysis, marketing research (consumer analysis), and even new product development (product innovations) or a study into the company's internal environment. In the research undertaken, the macro environment and its effects on the organization, customers and the new product are analysed by way of PESTL Analysis. To understand the effect of external environment further, a competitor/industry analysis is also done. 2.1 Organisation The organization’s Strength, Weaknesses, Opportunities and Threats are discussed below. 2.1.1 S.W.O.T. Analysis An analysis that identifies the internal strengths and weaknesses and the external opportunities and threats in relation to an organisation. SWOT is short for strengths, weaknesses, opportunities and threats. Marketers must be able to understand the current opportunities that are available in the market, the main threats that the business is facing and may face in the future, the strengths that the businesses can rely on and any weaknesses that may affect the business’s performance (Elliot, Rundle, & Waller, 2010) The Strength of the organization, under discussion, is the technology and pricing of the product. Major weakness is that the brand name is yet not established in the minds of the consumers. The opportunity lies in the fact that no other mobile company has yet launched a product especially for foreign nationals in Australia. Threat might be in the form of lesser inflow international students due to increasing competition from other countries and replicas of the mobile phone launched by the competitors. 2.2 Competitors/Industry As in November, 2008, there were over 21 million subscribers in Australia with an estimated mobile penetration rate of more than 90%. The Net Annual Import of mobile phone units into Australia over the past two years has been on average 8.1 million handsets (Australian Mobile Telecommunications Association (AMTA), 2008). In 2009 alone, more than 9 million GSM+3G handsets were imported (AMTA, 2010) Independent market research conducted annually by IPSOS on behalf of the mobile phone industry into mobile phone use, consumer attitudes and behaviours since 2005 shows that most people now buy a new mobile phone every 12-24 months (Australian Mobile Telecommunications Association (AMTA), 2008). The above mentioned facts clearly focus on the scope of indigenous mobile phones in Australia. Not only is there increased first time usage of mobile phones, even existing users replace their mobile phones within two years of usage. Moreover, local manufacturing of mobile handsets would help in keeping the costs in control and give an advantage in pricing. Thus, launching a new handset in Australia looks like a lucrative opportunity due to high usage (including replacement usage). Currently, Nokia, Blackberry, i Phone and Palm are the major competitors providing similar mobile solutions to the end-users (i.e. mobile and computer both in a handset). However, none of the above mentioned companies have targeted international students as yet and their pricing is also higher due to import of handsets rather than local manufacturing. Thus, from the angle of existing competition, the new product is priced differently and has a different target segment and therefore, it is not another ‘me too’ product, but rather a product with a huge potential as evident in the primary research. 2.3 P.E.S.T.L P.E.S.T.L. stands for Political, Economic, Socio-cultural, Technological, and Legal. Political Government legislation requires mobile phones to be below 2.0 watts/ Kilogram radiation level (Cell-Phone-Accessories, 2010). Our product’s radiation level is 1.5 watts/Kilogram therefore, it abides by the government. Our product will actually be healthier and a better technologically advanced mobile phone alternative (Cell Phone Accessories, 2010) Economic Environment Our product will accommodate the inflation rates that are rising by lowering costs in the production of our new mobile (Trading Economics, 2009) Socio-cultural Our product is a mobile that is specifically designed for the International Students of Australia. This would essentially affect the present mobile phone companies like that of Telstra and Optus (Fun SMS, 2009). Technology In working time, our mobile can have a video conference with 20 people at the same time. In spare time, for shopping, our product can show you where the discounts are and the best place to buy daily goods. In 1983 the first mobile phone appeared (Cooper, 2010) Legal A patent is a document granting an inventor sole rights to an invention (Google Definitions, 2010). There are three steps to apply for a patent. The first step is to check and see if your inventions are useful, unique and not obvious. The second step is to contact a lawyer. The third step is to review the lawyer’s draft of your patent application and send it to the Patents & Trademarks Office (About.com-Inventors, 2010) 2.4 Primary Research The questionnaire for the primary research is attached as appendix. 3 New Product Concept After doing SWOT, industry/competitor analysis, and PESTL, it was found that mobile handsets market in Australia has vast potential owing to high penetration and tendency to replace the mobiles early. Also it was found that the mobile handset needs of students from abroad in Australia and travellers is going unaddressed currently. International students need a handset which not only works as a phone but also as a computer to help them stay in touch wherever they are and carry on their study related jobs eve on the go. Hence a new mobile handset, or a Multi Technology Device, targeted at international students and travellers, with the features of mobile and computing together is suggested to be launched by the team members. 4 Segmentation, Target Market Positioning Segmentation is about dividing the markets and customers into various groups, each have different needs and wants, to allow businesses to deliver tailored products/services to them, meeting their needs and wants (Elliott, Rundle-Thiele and Waller, 2010, p. 175). The four segmentation variables are demographic, psychographic, geographic and behavioural. The four segmentations that we have chosen are the following (They are also in order of rank): International Students Business People Travellers Married Couples The target market we have chosen is International Students. The target market positioning is the perceptual map below. (Elliot, Rundle, & Waller, 2010) 5 Marketing Goal Marketing Goal is kind of a summary statement of the overarching goals of a specific organization (Quint Essential Careers, 2010). Moreover, certain parts like ethical behavior, sustainability as well as social responsibility (Ethics and Social Responsibility) should also be taking into consideration by most companies. It is not easy to gain profits within a short period because the competition of telecommunication is extremely violent (Elliott, Rundle-Thiele & Waller, 2010, p. 13). Therefore, it is realistic to get investment back within one year because once one year is over then the organization will gain profit. A lot of promotions will be done in order to make the customer’s aware of the product in the long term so that more and more customers’ are willing to consider the future products. Our organization is new to the whole telecommunication system. As large numbers of telecommunication organizations are quite powerful in the market, which means there are expectations to make up a high percentage of the whole market share. Therefore, 10% to 15% of the market share within Australia’s telecommunication is the ultimate objective of the organization. Certain philanthropic campaigns will be done to expand the positive influence of the organization. For example, protection of the environment will be ensured because the materials of the phones are definitely reusable. It is an organization’s obligation to maximize the positive impacts and minimize the negative impact on society (Elliott, Rundle-Thiele and Waller, 2010, p. 5). Not only does it show companies responsibility to the whole society and the environment, but it makes organizations survive in the long term as well. Customer’s retention is vitally important to one organization’s survival (Drilling Down, 2009). Therefore, official websites will be set up for customers. People will be able to gain knowledge about the product and order products via the websites. Customers will also have right to give remarks about the products and give suggestions. This will then allow the producers to cater to the customer’s demands instantly. The official website makes it possible to keep in touch with the customers in order to know what the target market really wants. In addition, it is an efficient way to keep customers and attract new customers. 6 Marketing Mix Marketing mix refers to four marketing activities which are product, distribution, promotion and pricing. Companies control them to satisfy needs and wants of target markets (Rundle-Thiele, Elliott, Waller & Paladino, 2007, p. 7). 6.1 Product Product is a bundle of attributes that exists for the purpose of exchange to satisfy customers and organizational objectives (Rundle-Thiele, Elliott, Waller & Paladino, 2007, p. 8). Product concept is the concept that the concept that the consumer will favour the product that offers most qualities, performances and features (Answers.com, 2010). Product variable decisions and certain relevant activities are quite significant as they are directly involved with creating products to meet customers’ needs. Moreover, taking the product variables into account is beneficial to achieve objectives for organizations (Rundle-Thiele, Elliott, Waller & Paladino, 2007, p. 9). This product is not only one kind of communication device; it is more like a portable computer which has powerful functions which makes life rather more colorful. Additionally, certain functions are customized for overseas people living in Australia. These specific functions make life easier in Australia for those who are not locals. For example, the target market, International students. There are two forms of packaging. One is original and the other is luxurious. The price of luxurious packaging is higher than the original packaging. The reason for this is because the phones with luxurious packaging will need more interesting functions for the customers. This phone is like an iPhone. The reason for this is because the iPhone is extremely popular in Australia and if this phone is like one then it will make it much more easier for the consumers to be interested in it. When it comes to the warranty of the product the customers will not be disappointed. To fix a non-artificial breakdown within two years is no charge. People would just need to log on the official website to let the producers know the phone is broken so they can go to the customer and repair or even replace the phone. 6.2 Place (Distribution) Products should be available at the right place and in places with convenience, which means that the distribution is considerably important (Rundle-Thiele, Elliott, Waller, & Paladino, 2007) There are distribution channels within the distribution strategy. There is also a selective and exclusive distribution when it comes to distribution because of the target market being International students. The products are available in places that are close to universities in Australia and in shopping centers in Australia, which is the selective distribution. On the other hand, the exclusive distribution is that the customers will be able to customize their phones to suit their personal demands at the luxurious phone stores. The product is available in universities, shopping centers and on the official website for those who don’t like to leave the house. These areas make it more convenient for consumers who are interested in the product. Consumers can also access the official website to receive further information. The internet is significant for both organizations and customers. It is kind of a distribution strategy for companies to set websites to satisfy their customers wants and desires more effectively and efficiently. The company will set up official websites as said before, for the specific products to address the customers. 6.3 Promotion Promotion is the marketing behaviour which has some activities to attract potential customers, partners and society. The following four steps must be followed in order to promote the mobile phone. The first step is that the mobile phone should be created with awareness, it should do philanthropic activities, such as support art development and contribute money to places that have been destroyed. The purpose is to make the product be widely known as an advantage. The second step is to stimulate the demand for target market, this means that the producers of the mobile phone will need to focus on the customers wants and desires. Understanding customers’ wants and desires allows you to treat different customers differently according to what they want and create loyalty from a learning relationship (Rod, 2000). The mobile phone has various functions of technology that can provide customers with a variety of demand for one mobile phone. Thirdly, you have to use the shelf displays in retail stores to promote the product, the prerequisite is the product’s advertisement because it has more prominent features. This way it is a win – win situation (Elliott, Rundle-Thiele, & Waller, 2010). Finally, in the promotion, we can stress competitive advantages about the mobile phone, such as, the library and the world guide advantages. The four elements of a promotion mix are advertising, public relations, sales promotion, and personal selling. These four elements are in this mobile phone to enhance its promotion. The four elements are all important to marketing because they are: advertising, which is a big part of a business because every product has a lot of money spent on it. In addition, it will allow many people to be able to receive all of the product’s information. Next, the goal of public relations is to create and maintain the credibility for market organization’s and its stakeholders. The third reason is sales promotion. Sales promotion can make sales run more smoothly, so that the customers can obtain the retail’s reward. The last reason is the personal selling. The personal selling can provide more special and personal services (Elliott, Rundle-Thiele, & Waller, 2010). The first thing that you should do in this promotion process is make an advertisement which can express the product’s features that have more advantages than other normal phones. For example, the library and world guide functions are one of the mobile phone’s most special features, so in the advertisement, the promotion would need to make some sections to describe these two functions. Then, by personal selling, the promotion can give its customer’s some personal and unique services that make them feel satisfied. For instance, make different personal selling method to different kinds of people. If the customer is an international student, then the personal selling will need to focus on its price which is not high. If the customer is into the fashion area then the personal selling would need to put more attention on its stylish appearance and the 10 million pixels. However, if the customer is a traveller then it would be better if the mobile phone had a language dictionary and a world guide function, due to the fact that these functions are important for travelling. Pull policy would also need to be in the mobile phone integrating promotion because this policy focuses on creating the customer’s wants and desires which is similar to the promotion plan before. 6.4 Price The phone is high quality and has a general low price. More economic benefits can be obtained if the sale price is low. The purpose of marketing is to develop buyers and sellers’ to exchange their offerings that have value. It is also to develop the relationship price which is the most important and the main factor (Elliot, Rundle-Thiele, & Waller, p. 4). Like all new products, this mobile phone wants to obtain long-term profit and not just short-term economic interests. Therefore, the price of this product will be low in order for the target market, International students, can afford it and still have high quality. This then means that the long-term profit will be a goal that the producers can reach. These symbols of brand positioning plays an important role in the marketing, high quality and low price can make customers trust this product, this then gives a better brand image. Moreover, in some important festivals and holidays, the producers can also lower the price of the phone. This can also help the business’s behaviour of the mobile phone become the market price leader and it can provide more competition in commercials. 7 Recommendation The SWOT analysis shows that Reference List About.com-Inventors. (2010). How Do I Apply for a Patent. Retrieved from About.Com: http://inventors.about.com/od/firststeps/a/application.htm. Aguilar, F. J. (1967). Scanning the Business Environment. New York: Mcmillan Co. AMTA. (2010). Handset Shipments. 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