Market for Caller Tones - Case Study Example

The Caller Tone Challenge Case Study Situation Faced By m.Net m.Net is a mobile service provider which provides solutions to leading telecommunications and media companies. In September 2006 introduced a new service for Telstra under a sole distribution agreement. This service was called the Bigpond caller tones. But apparently m.Net was in for a huge challenge it had a limited budget for marketing the new service. Most of it’s marketing was restricted to non-prime time. Keeping in mind the low budget it had to reach it’s target group by word of the mouth so that the customer take up could continue. Market for Caller Tones There definitely is market for caller tones this can be identified by the surveys carried out in the given case study apart from this Telstra’s .annual report of which showed that customers who were billed spend five times as much on their mobile phones then prepaid customers. Target Market As per the case study the Key target group for BigPond caller tones is under 40, while it’s main target customers are in the 20 year age group. Of course the target is narrowed to Telstra’s 8.6 million mobile phone customers. I consider this to be the prefect target group as caller tones is something which would interest the young adult age group as they have more peer orientated social life. Keeping this in mind consider the following group of 14 year olds who were surveyed none of them had a account with Telstra . Thus excluding them from their target population. A survey of 33 people between the age of 20-30 were surveyed it was found out that 1 in 33 had a Telstra mobile phone and eight were aware of the caller tone service. The above survey thus further proves the fact that best target group is 20-30 years of age. Recommended Marketing Strategy With the intense competition in the telecommunication industry, marketing is an important element in Telstra to build its presence in the community. This report seeks to analyze Telstra’s marketing strategies and help to point out the areas of development for Telstra. As Telstra is involved in the telecommunications and information services industry, the marketing strategies will be divided and analysed according to their respective industries. Telstra bases it’s marketing mostly by means of print and electronic media, billboards and value-added mediums. A Major competitor of Telstra is Vodafone, but Telstra still maintains its dominant position in the telecommunication market. With the diminishing growth in the Australia's telecommunication industry, Telstra still capture a market share greatly over the competitor. Telstra and Vodafone each operate separate GSM mobile networks, capturing the market share of around 57 % and 31% respectively as of 2005 (John 2004 p 30). Price A comparison of the pricing component of Telstra’s Big Pond caller tones marketing strategy with offerings from competitors reveals that Telstra does not always have the lowest rates. Telstra’s caller tones plans have to provide the lowest caller tones rates from other Telstra’s offerings plans. Thus Telstra should emphasize on this feature, rather than pushing their price as their primary selling point. On the other hand, the company is should try to attract price conscious consumers with its money back promotion for caller tones plans. Place Telstra’s telecommunications products and bigpond caller tones service information are widely available throughout Australia. Telstra has 115 owned Telstra branded stores and 153 licensed shops, with two of its largest licensors being the mobile phone chain Crazy John's and Australia Post. In addition, the company also has a compelling web presence with a complete online shop for purchasing supplementary services such as ring tones. By doing this it can Telstra shops and dealers are strategically located across Australia. It attends to the need of the people in their respective area. Apart from its own dealers and shops, it also has Crazy John as its exclusive mobile phone dealers which are very reputable and successful dealers. Telstra definitely has the edge over its competitors in the felid of caller tones as well as their mobile phones in terms of numbers and locations. Promotion Telstra promotes its bigpond caller tones through media, out-of home billboards and also through their in-store value-added product offerings. For example, the promotion of the Bigpond is done in variety of ways, such as using humour and celebrities through their advertisements and electronic billboards in train stations, advertisements on trams, and also on their website. Telstra also promotes their bigpond caller tones through providing value-added components to attract customers and promote customer loyalty. Telstra's advertising budget was about $95 million in 2002. Local Sport Sponsorship Bigpond caller tones should be used to sponsor big sports events that take place in Australia such as ruby matches. They can also sponsor sports teams as well. Telstra can compose caller tones according to the sports season as well. This will help in attracting a target population that loves sports. Other Celebrities / Famous People To build up Bigpond caller tones brand positioning through associative imagery, Telstra should make use of celebrities in their advertising, celebrities like beckham may do wonders for their advertisement campaign. This helps customers to associate a service with their favourite celebrities. They should also use a few movie stars in order to attract a more fun loving and young market. People The target market in which it will be marketed is the 20-30 age group. Process The process of applying for Telstra’s up Bigpond caller tones are relatively easy, where customers can go through Telstra website to select their tones through the Internet. The process involves first applying for the caller tone service, then selecting a caller tone from the given tone list from the website, after that flowing the instruction given on the website. Physical Evidence There are hundreds of music tracks and lots of other BigPond Caller Tones available from record labels including Universal Music and Sony BMG. Telstra customers also have unique access to content from Australian Idol and other Telstra sponsored properties such as the V8 Supercars and AFL footy anthems. The BigPond Caller Tones service is available for $1.95 each month, plus a one-off purchase price of $3.50 for each track selected. Once purchased the track can be used indefinitely. As a special promotional offer Telstra customers can trial the service for the first month for free and choose a bonus track from a selection of tracks to get started (http://premium-mobile.com/content/australia-new-bigpond-caller-tones-add-bling-bling-to-your-mobiles-brrring-brrring/). Product/Service BigPond Caller Tones lets Telstra customers changes the standard “brrring brrring” sound that a caller normally hears while they wait for their call to be answered, with a personalised audio clip. These include a range of latest music releases, celebrity voices, footy anthems, jokes or quotes. BigPond Caller Tones are available to all Telstra GSM and Telstra 3G mobile customers and can be purchased from the BigPond website or from the Telstra mobile phone using SMS, the BigPond portal on mobile phones, or by calling 1300 104 104 (http://premium-mobile.com/content/australia-new-bigpond-caller-tones-add-bling-bling-to-your-mobiles-brrring-brrring/) Revues and Sales For the revues and sales generated of Bigpond please refer to the appendix. Table 1 and graph 1 both show the progress bigpond has made, they give clear view of the direction bigpond is going in. Keeping in mind the fast track which it is moving as shown in graph 1 and table 1 in one can recommend a tactical advertising plan as well. Tactical Advertising Plan The tactical advertising plan for the BigPond Caller Tones is to create custom ad campaigns using the appropriate media outlets that will best enable Telstra to reach their specific target markets. The objective of Telstra ‘s tactical advertising plan for the BigPond Caller Tones is three-fold:1.Announce and promote the upcoming release of the BigPond Caller Tones 2.Communicate the advantages the BigPond Caller Tones features offer in comparison to other Caller Tones currently on the market 3.Encourage prospects to take advantage of limited-time, introductory promotional offers. For the introduction and initial promotion of the Caller Tones, Telstra will use television, radio, and the Internet to target our specific market segments and spark broad reaching consumer interest in the features and benefits offered by the BigPond Caller Tones. Television and the Internet are great advertising mediums for demonstrating the BigPond Caller Tones features, and ease of use. Viewer demographics will assist in pinpointing the most effective channels, days, and times to run television advertisements that will reach our intended targets in a cost-effective manner. Radio advertising offers a highly segmented medium that allows advertisements to be tailored to the specific profile of the listening audience. Internet advertising offers the advantage of active reader involvement, and links can be provided to allow customers to have a look and listen to the quality of their selected BigPond Caller Tones with a few clicks of their mouse. These three advertising mediums will be the primary vehicles used to introduce BigPond Caller Tones to the general public and prompt consumers to take advantage of introductory promotions before they end. Telstra will buy space in local newspapers to advertise the promotional offers of the BigPond Caller Tones. After the initial roll-out of the BigPond Caller Tones, Telstra will continue to promote the new device using television, radio, and the Internet, but will expand the advertising plan to include several other advertising mediums as well. Magazine ads in publications that appeal to our targeted demographics will be used, and billboard advertising will be used to impart our message to the driving public. Direct mail will also be used to specifically target select demographic groups with promotional offers to entice them to switch their caller tones service. The advertising schedule should run on a continuous basis due to the high level of competition in the industry and the introduction of competing products to the market place. Due to global environment Telstra operates in, it is advisable to hire a full-service advertising agency to assist our in-house staff in developing appropriate ad campaigns for our overseas markets. Public Relations Opportunities Telstra will need to identify key public relations opportunities for the new model. The most important of these opportunities will involve the product launch. After sending out press releases to the various media outlets, they will unveil the BigPond Caller Tones service and hold a question and answer demonstration with the press. The goal here will be to get the BigPond Caller Tones into the media in as soon as possible with the knowledge of how the service works and the new features that are available on it. This needs to be a very “hands on” demonstration so the members of the media are able to accurately describe the caller service. From this an immediate buzz start to occur for this service so Telstra will need to couple this event with strategic advertising to create a solid push in sales. Telstra will also offer free caller tones to several celebrities popular with the younger segment of our target market so they can be seen using the service, in addition to encouraging movie studios to have actors and actresses use the service in their productions. With these publicity programs in place, we will ensure that the big pond caller tones is rolled out in style, the public is aware of the service and its features, and the service has a direct effect on boosting Telstra’s reputation. Budget The overall marketing budget covers expenses for marketing personnel, marketing training, marketing consultants, market research, market development and promotion. To reach to the target market, a thorough promotional plan with selected advertising mediums must fit well with the overall marketing strategy as well as the marketing budget. The targeted big pond caller tones users are varied in age groups, which consist of teenage, young and older adults, and business people who drive frequently. To effectively promote the big pond caller tones, different media can be utilized to reach the various market segments. A wide range of promotional activities and costs are considered to support these promotion objectives. Selected advertising mediums include television & cable, newspaper, direct mail, magazine, radio, Internet, special event & trade shows, and brochures & flyers. Conclusion Keeping in mind the fact that bigpond caller tones does have market. If m.Net follows the recommend marketing strategy then it is quite possible that it will be able to make bigpond caller tones the most used tones in the telecommunication industry. References http://premium-mobile.com/content/australia-new-bigpond-caller-tones-add-bling-bling-to-your-mobiles-brrring-brrring retrieved on September 3rd 2008 content.edgar online.com/edgar_conv_img/2007/03/05/0000950123-07 retrieved on September 3rd 2008 John, F., Group. (2004), "AFR Boss 2004 Marketing Survey", Australian Financial Review Boss magazine, p30-33 google.brand.edgar-online.com retrieved on September 3rd 2008 Appendix Graph 1 (google.brand.edgar-online.com) TABLE 1 Half-year results and operations review — December 2006 Segment information Segment information                                                       Segment revenue     Segment EBIT       Half-year ended 31 December     Half-year ended 31 December       2006     2005     Change     2006     2005     Change       $m     $m     %     $m     $m     %   T Telstra Consumer, Marketing and Channels     4,679       4,481       4.4 %     2,763       3,041       (9.1 %) T Telstra Business     1,608       1,597       0.7 %     1,299       1,302       (0.2 %) Telstra Enterprise and Government     2,214       2,248       (1.5 %)     1,291       1,302       (0.8 %) Te Telstra Wholesale     1,487       1,427       4.2 %     1,451       1,318       10.1 % Sensis     885       1,012       (12.5 %)     365       509       (28.3 %) Te Telstra International     820       709       15.7 %     26       32       (18.8 %) Te Telstra Operations     115       123       (6.5 %)     (1,912 )     (1,785 )     7.1 % O Other (i)     52       50       4.0 %     (2,343 )     (2,266 )     3.4 % E Elimination     (215 )     (232 )     (7.3 %)     (2 )     31       (106.5 %)                           T Total Telstra (ii)     11,645       11,415       2.0 %     2,938       3,484       (15.7 %)                         (online.com/edgar_conv_img/2007/03/05/0000950123-07) Revenue derived from our BigPond products are recorded in the customer facing business segments of Consumer, Business and Enterprise and Government. Certain distribution costs in relation to these products are recognised in these three business segments. Telstra Operations recognises certain expenses in relation to the installation and running of the broadband. In accordance with our application of the business segment definition in relation to customer type, we have not reallocated these items to the Telstra BigPond business segment. These allocations reflect management’s accounting framework and internal reporting system and accordingly no reasonable basis for reallocation exists. Read More