Marketing Management at the Hellenic Telecommunications Organization - Business Plan Example

Marketing Management at the Hellenic Telecommunications Organization completion: 07 May Table of Contents INTRODUCTION Description of the organization 2 Target consumer segment 2 Marketing goals for the campaign 3 The First 3Ps 3 PROMOTION PLAN USING AIDA+ 7 Promotional Outlook 7 Stage 1: Awareness 8 Step 2: Interest Creation 9 Step 3: Desire 9 Step 4: Action 10 Step 6: Retention 10 PROMOTION BUDGET & IMPLEMENTATION CALENDAR 11 Objective-and-task budget 11 Time line of Promotion 12 REFERENCE LIST 14 INTRODUCTION Description of the organization The Hellenic Telecommunications Organization is the largest telecommunications services company in Greece (The Associated Press, 2009). The company offers fixed and mobile telephony services; broadband services, leased lines services and high-speed data communications (Pepenel and Voicu, 2010, pp. 96). Target consumer segment The target market for the campaign is the Greek population that owns new generation electronic machines and devices. In particular, the electronic devices that will allow users to access the product package include those that link traditional TV to the internet, including set-top boxes and Smart TVs (Glaser, 2013). The users will enjoy the integration of internet connectivity and broadcast digital TV over a PC or TV outlet. This target market is already available; it was in the past served by companies like Alpha digital, which left the industry in 2002, after capturing a market size of 35,000 subscribers (Papathanassopoulos, N.D. pp. 451). The marketing campaign will, target the consumers living in urban and rural areas, while continuing to expand the market reach across other parts of the country (Best, 2002). Providing Hybrid Broadcast Broadband TV will exploit the next big industry development, taking into account that the EU has been pushing its member states to switch from analogue to digital television; the EU had required member states to make the switch by 2012. The pending switch-off will create a big market for the company (Iosifidis, 2011, pp. 3). This new customer is the target for this marketing campaign, because Greece did not take up past technologies like analogue pay-TV in the past, but has taken up the challenge of digital TV (Papathanassopoulos, N.D. pp. 448). The market’s interest to take up digital TV was demonstrated by the launch of digital TV services by Multichoice in August 1996 (Papathanassopoulos, 2007, pp. 94). The high potential market has not been fully exploited in Greece, and that offers the rationale for the choice of the segment. Marketing goals for the campaign 1. Contribute to the Greek community as a whole Strategic actions include using the company’s media to address social problems like racism. 2. Contribute to the economic prosperity of the company and its stakeholders Strategic actions include making OTE TV the leading pay-TV and media destination – to create more value for shareholders. 3. Minimize the impacts of the company’s business throughout our supply chain. Strategic actions include using the expertise and the resources of the company to engage communities and corporate players about environmental protection, and the areas where they can participate. OTE TV MARKETING MIX The First 3Ps The company plans to adjust the three parameters of its marketing mix (product, price and place), to improve the effectiveness of the marketing strategy from time to time (Kotler et al., 2005). Product: The Video on Demand (VOD) product marketed will be delivered over the Hybrid Broadcast Broadband TV (HbbTV). The package allows TV users from watching video and listening to music during the time of their choice, unlike traditional TV programming framework where users watch during a specified time (Godard, Bisson and Aguete, 2003). The system will also be configurable for video viewing over a personal computer; the user will stream the videos using a computerized set-top box supplied by the company at a reasonable market price. The computerized set-top box will be sold at a price of USD 80, which is much lower than that of similar products, including analogue-to-digital set-top box signal converters. The initial price of the computerized set-top box is introductory, and has been introduced, to enable as many customers to afford the product, allowing them to experience the uniqueness of the package. Over the uniquely configured system, TV and PC users connected to the company’s network will have the option of downloading videos to their digital video recorders or personal computers, for watching at a latter time (Papavassilopoulos, 2012). Apart from accessing pay-per-view programs, the package also allows them to watch local channels at no charge, especially in the cases where subscriptions are not renewed in time. The package is a hybrid of internet and digital television. Apart from the programming side of the package, customers will be allowed enough bandwidth to use two remotely connected computers, which can use the system to access the internet. In the area of packaging the product, the appearance of themes, background screens and menu items will be customizable by the user. This aspect of packaging will meet the customer’s demand for aesthetics, which is independent of the functionality of the package. The graphical user interface of the package will be determined, and reviewed from the feedback collected from the customers of the service (Goi, 2009). One of the innovative graphical characteristics of the service includes that menu items that are highlighted will widen in size, so as to make them distinctive from the rest. Price Price as the second aspect of the marketing mix will play an important role in the marketing of the VOD packaged offered by the company. This aspect of the marketing mix is very important to customers, when they are making the purchasing decision (Goi, 2009). The company is currently using skimming pricing; it is relying on the sales of few VOD products at a premium price, with the aim of offsetting the costs used in developing the product package (Varki and Colgate, 2001). The limitation of this pricing is that it has been hard for the product to penetrate the general market; many customers cannot afford it (Rizzuto and Wirth, 2002). Table 1: Price comparison for initial pricing system, current system and competitor prices Product Initial OTE-TV Price (USD) OTE-TV Price (promotional) Competitor 1 Price Competitor 2 Price Premium Price VOD home package 200 100 150 120 Computerized set-top box 150 80 100 90 VOD Commercial Package 250 150 160 160 Computerized set-top box 200 120 120 130 Promotional Package for students VOD home package Non 80 - - Computerized set-top box Non 60 - - In setting the new prices of the product, the company will employ a high-low pricing Model. The company took into account the prices of comparable service packages offered by competitors and the demand for VOD packages (Ancarani and Venkatesh, 2004). In the case of delivering the VOD package to customers, the company adopted the model where pricing is targeted at different customer groups (Papavassilopoulos, 2012). For example, in supplying the VOD package to home viewers, the price level is lower than that of the package designed for use by commercial buyers, like restaurants, companies and airlines. The differences between the commercial package and the home viewer package is that, the commercial package allows the user to connect the computerized set-top box to more than two TVs and all of them will to browse media sources independent of one another. On the other hand, the home user package only allows the user to connect the computerized set-top box to only two TVs (Saylor, 2012, pp. 86). In the area of linking the computerized set-top box to personal computers, so as to browse the internet or watch programming, the commercial package will allow the user to connect more than two PCs, but the user of the home user package will only be able to connect two PCs. Apart from the home or commercial use nature of the package, the monthly subscription paid by the customer will also depend on the programming they will get. For example, the packages offering more programs and more customizable menus will be more expensive. One groups targeted by the company with a special price is students, particularly, those living at university campus and college grounds. By offering the student package at a relatively price, the company aims to increase the sales of the product and also build its customer base and increase brand loyalty. Through this pricing strategy, the company will take-on the challenge of competing with competitors on price, while at the same time serving premium customers. Place Currently, the company is selling the VOD set top box in urban centers, through company outlets, and major supermarket chains. The problem with the current distribution model is that it has not allowed access to the customers outside urban areas (Goi, 2009). As a new product package, the product needs to be offered in as many geographical centers and commercial areas in the market as possible. However, in order to guarantee that customers only buy genuine products, the outlets to sell the products will be vetted by the company. In the choice of the areas to supply the products, the current campaign is aimed at taking it to all markets – urban and local. To realize that, the company will recruit major supermarket brands, including Arista, Alfa-Beta Vassilopoulos, Carrefour Marinopoulos, Proton, Lidl, Veropoulos, 3B Markets, Helios Supermarkets, Aldi, Plus and Dia chains. Apart from these supermarket chains, the company will contract reputable computer and media-related outlets around the country, to sell the VOD set-top box on commission terms (Stephen and Coote, 2005). The sales volumes made through the agency agreements will be complimented by those made at company outlets and company promotional tours. The distribution model was changed, with the aim of improving the relationships maintained between the company, retailers, customers and distributors. This improvement was mainly influenced by the incorporation of the internet into the model, which allows the company to benefit from channel power. The new distribution model will also improve the customer care offered to customers, as they can communicate with the company directly (Williams et al., pp. 1). From a comparative point of view, the company’s new distribution model will be highly effective, as compared to that of major competitors. Many of the company’s competitors are relying on traditional distribution models. However, in order to guarantee the sustainability of the distribution model, the R & D department researched the effectiveness of the model, and is still developing new checks to guarantee that it will yield positive outcomes in the long term. PROMOTION PLAN USING AIDA+ Promotional Outlook Target customers: current urban customers, TV and internet users in urban and rural areas Promotion objectives: Inform all TV and internet users about the VOD product Tactics to implement: online marketing, product trials and television advertising Implementation: initiate online marketing, product trials to potential customers, and advertise the product over the television Evaluate: Review the outcomes of the promotion plan Adoption of promotion plan to the 5 stages of AIDA+ Stage 1: Awareness In increasing the awareness of the target customers about the VOD product, the promotional team will rely on a variety of tactics, including online marketing, product trials and television advertisements (Martin and Schouten, 2012). Online marketing In using online marketing, the promotional team will send a press release, throughout a variety of highly-visited websites, including Face book, Tweeter, Google.gr, sport-fm.gr, sport24.gr and gazetta.gr, which are the most popular websites in Greece. The press releases will inform the general public about the product and where it can be purchased. Submitting product feeds to reach the general TV and internet users throughout the country will increase customer awareness. Product feeds will show photos, pricing, descriptions, and special offerings to customers. Lastly, the team will distribute a newsletter about the company and the VOD product. The newsletters will help the company to keep in touch with customers and potential customers. Product trials In using product trials, the promotion team will start with market analyses to pre-qualify potential customers (Rawal, 2013). After pre-qualifying potential customers, the team will supply potential customers with a free computerized set-top box and a month’s subscription to the VOD package. After the 1-month trial period, the promotion team will survey their levels of satisfaction, receive referrals and identify necessary product changes. The product trials will start with public places, where many customers can be targeted, including restaurants and hotels; potential customers will get an experience of the product. The timing of promotion will depend on the availability of target customers. Television advertisements The promotion team will use television advertisements to air information about the product, to the TV and internet users not reached using the product trials and online marketing channels. Over the TV advertising platform, potential customers and current customers will be informed about the features of the product, including newly incorporated product features. Step 2: Interest Creation Through online marketing, product trials and television advertising, potential customers will gain information about the benefits of the VOD package. The knowledge of the benefits will be fostered by further advertising, online marketing and product trials (Rawal, 2013). The interest created will compel customers to search for more information about the product. The search for more information will end with the formation of an emotional connection with the product. Step 3: Desire The development of interest in the VOD package will lead to the formation of an emotional connection with the product and its features. The emotional connection developed will be strengthened through informing them about the product, for example through product trials and that will push them towards buying. Step 4: Action Due to the demand triggered by the implementation of online marketing, product trials, and TV advertisements, the customer forms an emotional connection with the product. Through reinforcing the benefits about the product in their mind, they are driven into action, which entails interacting with the company, enquiring further and buying. Step 6: Retention Retaining the customers will be the work of the company, and that will take place after it has received the new customers. The company will retain the customers through improving the quality of customer care, so as to get referrals and advocacy from the current customers. Repeating the message communicated through product trials and TV advertisements to them helps them to formulate the referral messages communicated to others. Measuring the effectiveness of promotions Tracking mechanism Taking into account that the life cycle of the product is relatively long, the promotional team will use customer relationship management (CRM) to track the impact of the promotion. For instance, instead of only giving free products, it will collect information from potential customer, and give them the information required to quicken the buying decision (Dikimpe et al., 2005). The value of the networks developed (leads) ROI will be calculated without registering sales first, therefore the team will determine the value of a single network lead. The average conversion, in this case, is somehow arbitrary. The calculation is as follows: After spending USD 2000 on the promotion of VOD products, the team gave out 500 items, and in return got information about potential customers. The promotion led to the realization of 5000 leads. In calculating the value, the 5000 leads, the company hopes to make revenues of USD 12500, and therefore ROI will be: 12500-2000/2000 = 5.25. That number means that from incurring promotion costs of $1 the company will make revenues of $5.25. PROMOTION BUDGET & IMPLEMENTATION CALENDAR Objective-and-task budget Month Anticipated Sales (USD) TV Advertising Online Advertising and activity Product give away Travel Community-based advertising paired with community education Total June 2014 43,000 3,000 1,500 10,000 5,000 2,000 21,500 July 50,000 3,000 1,700 7,000 4,000 2,000 17,700 August 57,000 3,000 2,000 5,000 4,000 2,000 16,000 September 65,000 3,500 2,500 4,000 3,500 2,000 15,500 October 70,000 3,000 2,000 3,000 3,000 2,000 13,000 November 70,000 2,500 3,000 - 3,000 2,000 10,500 Total 355,000 18,000 12,700 29,000 22,000 12,000 78,200 In the current promotion campaign, the aggregate promotion is anticipated to yield leads, and 10 leads are estimated to be worth USD 500 in sales. This tells that the value of a lead is 10 percent. The calculations are as follows: the combined promotional outlook of the campaign is estimated at: June 43,000-21500/21,500 = 1 July 50000-17700-17700 = 1.82 August 57000-16000/16000 =2.56 September 65000-15500/15500 = 3.19 November 70000-13000/13000 =4.38 December 70000-10500/10500 =5.67 Time line of Promotion June July August September October November TV Advertising Run 5 times a week Run 5 times a week Run 5 times a week Run 6 times a week Run 5 times a week Run4 times a week Online Advertising and activity Send press release to major websites every week. Submit product feed daily. Dispatch newsletter once Send press release to major websites twice every week. Submit product feed daily. Dispatch newsletter Twice Send press release to major websites thrice every week. Submit product feeds twice daily. Dispatch newsletter Twice Send press release to major websites thrice every week. Submit product feeds twice daily. Dispatch newsletter Three times during the month Send press release to major websites thrice every week. Submit product feeds twice daily. Dispatch newsletter Twice Send press release to major websites four times every week. Submit product feeds twice daily. Dispatch newsletter four times during the month Product give away Give free set-top boxes from Monday to Friday Give free set-top boxes on Monday to Thursday Give free set-top boxes on Monday to Wednesday Give free set-top boxes on Monday and Wednesday Give free set-top boxes on Monday and Tuesday Give free set-top boxes on Monday only Travel Travel to urban and rural target markets five days a week Travel 4.5… days a week Travel 4… days a week Travel 3… days a week Travel 2… days a week Travel 2… days a week Community-based advertising paired with community education Deliver community training and promotion from 8 am to 5 pm Monday to Friday Deliver community training and promotion from 8 am to 5 pm Monday to Friday Deliver community training and promotion from 8 am to 5 pm Monday to Friday Deliver community training and promotion from 8 am to 5 pm Monday to Friday Deliver community training and promotion from 8 am to 5 pm Monday to Friday Deliver community training and promotion from 8 am to 5 pm Monday to Friday (Srinivasan, 2004) REFERENCE LIST Ancarani, F. and Venkatesh, S., 2004. Price Levels and Price Dispersion Within and Across Multiple Retailer Types: Further Evidence and Extension. Journal of Academy of Marketing Science, 32 (2), pp. 176-187. Best, R., 2002. Market-Based Management. 3rd. Upper Saddle River, NJ: Prentice Hall. Dikimpe, M., Hanssens, D., Nnijs, V., Steenkamp, J., 2005. Measuring short- and long-run promotional effectiveness on scanner data using persistence modeling. Appl. Stochastic Models Bus. Ind., 21, pp. 409–416. Glaser, M., 2013. Your Guide to Cutting the Cord to Cable TV. PBS MediaShift. Godard, F., Bisson, G. and Aguete, M., 2003. European Digital Pay Television Platforms. Market Assessment and Forecasts to 2006. London: Screen Digest. Goi, C., 2009. A review of Marketing Mix: 4 Ps or More. International Journal of Marketing Studies, 1(1), 2-13. Iosifidis, P., 2011. Growing pains? The transition to digital television in Europe. European Journal of Communication, 26(1), pp. 3-17. Kotler, P., Saunders, J. Wong, V. and Armstrong, G., 2005. Principles of Marketing. 4th European Edition. Upper Saddle River, NJ: Pearson Education Limited. Martin, D. and Schouten, J., 2012. Sustainable Marketing. London: Pearson. Papathanassopoulos, S., 2007. The Development of Digital Television in Greece. Javnost-the Public, 14(1), pp. 93-108. Papathanassopoulos, S., N.D. Mass Media: About Greece, [e-journal] pp. 441-452. Available at: http://video.minpress.gr/wwwminpress/aboutgreece/aboutgreece_mass_media.pdf [Accessed 07 April 2014]. Papavassilopoulos, C., 2012. OTE TV targets new customers with movie channel launches. [Pdf] HIS Technology. Available at: http://technology.ihs.com/414125/ote-tv-targets-new-customers-with-movie-channel- launches [Accessed 07 April 2014]. Pepenel, M., and Voicu, I., 2010. The Organizational Structure of Telecommunications Companies Case Study: The OTE Group. European Journal of Interdisciplinary Studies, 2(2), pp. 96-54. Rawal, P., 2013. AIDA Marketing Communication Model: Stimulating a purchase decision in the minds of the consumers through a linear progression of steps. IRC’S International Journal of Multidisciplinary Research in Social & Management Sciences, 1(1), pp. 37-43. Rizzuto, R. and Wirth, M., 2002. The Economics of Video on Demand: A Simulation Analysis. Journal of Media Economics, 15 (3), pp. 209. Saylor, M., 2012. The Mobile Wave: How Mobile Intelligence Will Change Everything. New York: Vanguard Press. Stephen, A.T. and Coote, L.V., 2005. Brands in Action: The Role of Brand Placements in Building Consumer-Brand Identification. American Marketing Association Conference Proceedings, Chicago, 16, pp. 28. Srinivasan, S., Pauwels, K., Hanssens, D.M. and Dekimpe, M.G., 2004. Do promotions benefit manufacturers, retailers, or both? Management Science, 50, pp. 617–629. The Associated Press. 2009. Greece: OTE Says Q3 Net Profit Down 19 Pct. The Street, 11 May [Online]. Available at: http://www.thestreet.com/story/10622559/1/greece-ote-says-q3-net-profit-down-19- pct.html [Accessed 07 April 2014]. Varki, S. and Colgate, M., 2001. The Role of Price Perceptions in an Integrated Model of Behavioral Intentions. Journal of Service Research 3 (3), pp. 232-240. Read More