3G Marketing

Tomi T. Ahonen is an Independent 3G Consultant based in London. He has presented at 100 conferences in six continents and lectures at Oxford University’s 3G courses. He previously headed Nokia’s 3G Business Consultancy Department and oversaw Nokia’s 3G Research Centre. He also worked as Nokia’s Segmentation Manager. Earlier he worked for Elisa and Finnet International in Finland and OCSNY in the USA. Tomi’s accomplishments include the world’s first fixed-mobile service bundle, the world record for taking market share from the incumbent, and a multi-operator billing system. He started his career on Wall Street. Tom holds an MBA from St. John’s University NY, and a Bachelors in Marketing from Clarion University. His previous books are m-Profits and Services for UMTS. Timo Kasper is the Director, Finance, Administration and ICT (CFO) of Observer Finland, a company specializing in Competitive Intelligence and Business Environment Scanning services. Timo has been responsible for constructing winning strategies for the emerging competitive markets in Finland and deployed innovative IT and telecoms solutions. Earlier he worked as the Business Controller for Computer 2000 (aka TechData), Finland’s largest IT wholesaler, and started his career as an Auditor and Consultant at Arthur Andersen & Co. where he participated in a wide range of attest service assignments, mergers and acquisitions, legal and financial due diligence and business process re-engineering projects. Timo holds a B.Sc. (econ.) degree from the Helsinki School of Economics and Business Administration and lives with his family in Espoo Finland.Sara Melkko is an Independent Expert in the field of telecommunications and the Internet, having worked in Finland and Germany as Marketing and Brand Manager with the digitally converging solutions provided by Elisa Communications across fixed, mobile and broadband telecoms, and then with pioneering mobile Internet innovations with Jippii Group. Sara then worked with IT security matters with SECUDE GmbH. Sara has a multicultural and –lingual background and holds a Business Administration degree from the University of Passau in Germany and has completed the “European Master’s Degree in Human Rights and Democratisation” programme in Venice and Padua, Italy. Sara currently focuses on Human Rights Business perspectives within Corporate Social Responsibility. She currently maintains home bases in Frankfurt and Helsinki.

• About the Authors xviiForeword xixAcknowledgements xxi1 Introduction 11.1 A look back 21.1.1 Enter I-Mode 51.1.2 The flap about WAP being a failure 61.1.3 Growth rate 71.2 What have we learned? 81.2.1 Telecoms operators and 3G marketing 91.3 Lets touch upon definitions of 3G 101.3.1 So what is 4G 121.3.2 W-LAN or Wi-Fi is definitely not 4G 121.3.3 4G will arrive ten years from now 131.4 To sum up 132 Market Intelligence 152.1 What is market intelligence 162.1.1 Evolution of market intelligence 162.1.2 Information, analysis, knowledge and intelligence 162.1.3 Knowledge or Intelligence 172.2 Systematic market intelligence 172.2.1 Market intelligence and business intelligence 182.2.2 Legal and regulatory intelligence 182.2.3 Customer intelligence 192.2.4 Competitor intelligence 202.2.5 Technical environment intelligence 212.2.6 Telecoms is not used to rapid innovation 222.2.7 The computer industry thrives on rapid innovation 232.3 ‘Environment scanning’ intelligence 252.3.1 Resource market intelligence 262.3.2 Reference market studies 272.3.3 Partnership intelligence/networking 272.4 Towards a higher intelligence 293 Segmentation 313.1 What is segmentation? 323.1.1 Test of current telecoms segmentation 333.2 Segmentation criteria 353.2.1 Segmentation from the academics 353.2.2 Segmentation by geographical pattern 363.2.3 Segment by demographics 363.2.4 Industry type 363.2.5 Segmentation by using various distribution channels 383.2.6 Personal data 383.2.7 Segmentation by psychological patterns 383.3 ERP, CRM and segmentation 383.3.1 From hard to soft facts 393.3.2 Users broken down — segmenting situations 403.4 From theory to practice: building a segmentation model 413.4.1 Characteristics of a useful segmentation model 413.4.2 Segmentation by user behaviour 413.4.3 How many segments? 433.4.4 Comparison with the car industry 463.4.5 Beyond a segment of one 473.4.6 From business to individual 483.4.7 Self-organizing maps 483.4.8 From alphas to omegas 493.5 Developing the segmentation model 513.6 To sum up segmentation 544 Service Development and Management 554.1 Product development — the Five Ms 564.1.1 Power of personalization 574.1.2 Money brings content 584.1.3 Talking machines 594.2 Service management (product management) 614.2.1 Knowing the market 624.2.2 New service ideas 624.2.3 Brainstorming 634.2.4 From idea to opportunity 644.2.5 Let there be light 644.2.6 It is your own sales who knows your customer best 654.2.7 Caught in the middle of the triangle 664.3 The launch 674.3.1 Tariffing, cost and profit 674.4 Killing a service 684.5 To finish with service creation 685 Partnership Management 715.1 What is partnering? 725.1.1 Flavours of partnering 735.1.2 Who are the prospective partners? 745.2 Operators are new to this game 755.2.1 Culture shock 765.3 Revenue sharing 785.3.1 What kind of revenue (and/or cost) sharing options? 795.3.2 What level of revenue sharing 805.4 Main factors influencing split in revenue share 815.4.1 Exclusivity 825.4.2 Value chain 825.2.3 On-screen location 835.2.4 Brand strength 835.2.5 Location information 845.2.6 Charging/billing information 845.3 Rules of thumb 845.4 Contract management 865.4.1 Keys to success 875.4.2 Partnering for profit 885.5 Parting with partnering 896 Terminals 916.1 How our gadgets evolve 926.1.1 Convergence 936.2 The Swiss knife or all-in-one device 956.3 Custom-use devices 966.3.1 The PDA 976.3.2 Digital camera 996.3.3 Gaming devices 1016.3.4 The credit card 1026.3.5 GPS devices 1036.3.6 3G modems 1036.3.7 Custom devices 1036.4 Automobiles 1046.4.1 Servicing and maintaining the car 1046.4.2 Navigation 1056.4.3 Car security and anti-theft 1056.4.4 Multitasking and the car 1066.4.5 Games in the car 1066.5 More devices that seem like science fiction 1066.6 Handset subsidies 1086.6.1 Device needs 1096.6.2 Connectivity 1096.6.3 Synchronization 1106.7 Handing off on handsets 1107 Distribution 1137.1 Sales channels 1147.1.1 Operator’s own stores 1147.1.2 Independent stores 1157.1.3 Departments and sales desks of other stores 1167.1.4 IT integrators 1167.1.5 The Internet as a sales channel 1177.1.6 The mobile portal as a sales channel 1187.1.7 MVNOs 1187.2 Managing channel conflicts 1187.3 Selling new mobile services 1197.3.1 Bundling an m-component 1197.3.2 Soul of the store sales rep 1207.4 Information flow 1217.5 Warehousing, shipping, inventory 1227.6 Distribution as an end 1238 Portals 1258.1 Defining portals 1268.2 3G portal categorization 1268.2.1 Different types of mobile portal 1268.2.2 Categorization 1278.3 The 3D rule for mobile portals 1278.3.1 What is murfing 1288.4 Personalization 1298.4.1 Authentication (‘intelligent’ portal) 1298.4.2 Timing (‘instant’ portal) 1308.4.3 Positioning (portal ‘to go’) 1308.4.4 Pull versus push (portal ‘on demand’) 1308.5 Open content policy – a decisive battle over 3G’s success 1318.5.1 The more services, the more money for everybody 1318.5.2 Price strategies: skimming versus penetration 1328.6 Revenues and advertising 1338.7 Collect customer data (registration) 1338.7.1 Advertising 1348.7.2 Buy your ad on the top of search engines 1358.7.3 Cross selling (own products) 1368.7.4 Customer loyalty programmes/clubs 1368.7.5 m-Commerce (partner marketing) 1368.7.6 Multi-access portal 1368.8 Closing the portal 1379 Promotion 1399.1 Is the classic marketing mix all mixed up in 3G? 1409.1.1 The AIDA rule 1409.2 Crossing the 3G chasm 1419.3 Public relations and press relations 1439.4 Advertising mobile services 1449.5 Publicity 1479.6 Sponsorship and product placement 1489.6.1 Viral marketing and communities 1499.7 Conclusion 14910 Branding 15110.1 What is a brand? 15210.2 Why brand? 15210.2.1 Brands aid in decision 15310.2.2 Brands and teenagers 15410.2.3 Brands and price 15410.2.4 Brand and loyalty 15510.3 Needs to be comprehensive 15510.3.1 Brands in mobile telecoms 15610.4 How to build a brand 15710.4.1 Where do I begin? 15710.4.2 Employee buy-in 15810.4.3 Damaging the brand 15810.5 Multiple brand messages 15810.5.1 Cross branding 15910.5.2 Sub-branding (overall company branding versus product trademarks) 15910.5.3 Co-branding 16010.5.4 On-line branding 16110.6 Action plan for branding 16210.6.1 Branding ‘do’s’ 16310.6.2 Branding ‘don’ts’ 16410.6.3 Brand development plan outline 16510.6.4 Brands grow too 16610.6.5 After the brand, what is left? 16611 Service Adoption 16711.1 S-curves 16811.2 Where is the saturation level? 16911.2.1 TV set analogy 17011.2.2 But can you use two phones at the same time? 17111.2.3 Subscriptions and subscribers 17111.2.4 So where is the ceiling? 17211.2.5 ‘Near saturation’ myth 17311.2.6 An American consideration 17311.2.7 How high is high? 17411.3 Business or Residential 17411.3.1 The case for business customers 17411.3.2 The case for the residential customer 17611.3.3 Exceptional issues with 3G 17711.4 Early adopters 17911.5 Mass market 18111.6 The early eight 18211.7 Beyond the adoption 18612 Reachability 18912.1 Wireless carriages and voice telegraphs 19012.2 Enter reachability 19112.2.1 Calling the person, not the place 19212.2.2 Change plans 19312.2.3 Indispensible 19412.3 Reachability and mobile services 19412.3.1 SMS text messages and reachability 19512.3.2 Respecting privacy 19612.3.3 Knowing who calls 19712.4 Cellular is a distorted case of Metcalfe’s law 19712.4.1 Hockey stick is not Metcalfe’s law 19812.4.2 Inflection points for the hockey stick curve 20012.5 Most personal device 20012.6 Reach out and touch 20113 Selling Mobile Services 20313.1 What do you sell in 3G? 20413.2 Selling through distributors 20413.3 Selling to consumers 20613.3.1 Event related sales 20613.3.2 Bundling services with the subscription 20713.3.3 Billing inserts 20713.3.4 Portal placement 20713.3.5 Selling to businesses 20813.3.6 Corporate customers 20813.3.7 Large corporate customers 20913.3.8 SME or medium sized companies 20913.3.9 SOHO or small businesses 21013.4 Selling to partners 21113.5 Motivating the sales representative 21213.6 Handset subsidies 21413.7 Non-traditional sales 21613.7.1 Cross-selling 21613.7.2 Bonus point programmes 21713.7.3 Network effect/viral selling 21713.8 Sales out 21814 Tariffing 21914.1 But isn’t tariffing simple? 22014.1.1 Cost-plus tariffing 22014.2 Some customers are willing to spend more 22114.2.1 Airline analogy 22114.2.2 Applying the example to telecoms 22514.3 Profit and pricing 22614.3.1 Prices and usage 22814.3.2 The variety in acceptable price 22914.3.3 Prices for service introduction 23014.3.4 Penny for your thoughts 23114.3.5 Pricing of bundles (‘service packages’) 23214.4 Preparedness for tariffing 23214.4.1 Marketing research 23214.4.2 Tariff modelling 23314.4.3 Tariff trials 23414.4.4 Tariff adaptation 23414.5 How about one price for all? 23414.5.1 Pricing by data traffic 23514.5.2 Home zones and hot spots 23614.6 3G licences and the price 23714.6.1 Price 3G for mass market adoption 23714.6.2 Not a free for all 23815 Billing 23915.1 Charging, billing, reporting 24015.1.1 Charging collects the data 24015.1.2 Billing creates the invoice 24115.1.3 Reporting gives information to the caller 24115.2 Micropayments 24115.2.1 Credit risk 24215.2.2 To bank or not to bank? 24315.2.3 Tracking advertising and promotion revenues 24315.2.4 Tracking digital rights 24415.2.5 Billing can also be an added value service 24515.3 From billing to product management and marketing 24515.4 The call for one bill 24615.5 Revenue assurance 24715.5.1 Revenue leakage and profit 24815.5.2 Revenue assurance and 3G 24815.5.3 Billing complaints 24915.6 End to billing 25016 Other Revenue Streams 25116.1 Redefining the operator position 25216.2 Business models 25316.2.1 Case Jippii Group 25316.2.2 Case Sonera Zed 25516.2.3 Case I-Mode 25616.3 Operator revenue strategies 25716.3.1 Selling location data 25916.3.2 Location based push services 25916.3.3 m-Commerce 26116.3.4 mAd (mobile advertising) 26116.4 Revenue sharing 26316.4.1 Revenue sharing levels 26416.4.2 More money? 26617 Combatting Churn 26717.1 Basics of churn 26817.1.1 Who is a churner? 26817.1.2 Why customers churn – three general reasons 26917.1.3 The joiner 26917.1.4 The leaver 27017.1.5 The changer 27117.1.6 Selecting customers to target 27117.1.7 Stayers 27217.2 Churn is good — targeting competitors’ customers 27217.3 Churn is bad — don’t let valuable customers churn 27317.4 Combatting churn 27417.4.1 Price as the weapon 27417.4.2 Technical barriers and churn 27517.5 Number portability 27617.5.1 Changing numbers 27617.6 Loyalty programmes 27717.7 Handset subsidies 27717.7.1 What makes subsidies so damaging? 27917.8 From techniques of authentification to identity 28017.9 Back to the brand 28117.10 Community think 28217.10.1 Customer intelligence and churn 28417.10.2 Keeping customers happy 28517.11 An end to churn 28618 Marketing Plan 28718.1 Business, marketing, advertising plans 28818.1.1 Business plans 28818.1.2 Marketing plans 28818.1.3 Hierarchical nature of plans 28918.1.4 Segment marketing plans 29018.2 Marketing plan outline 29118.2.1 Plan ahead 29319 Postscript 295Being Part of the 3G Revolution 301Abbreviations 303Bibliography 307Useful Websites 309Index 313