Marketing Strategy for Sprint PCS George Ruiz New York

1
Marketing Strategy for Sprint PCS

• George Ruiz
• New York University
• Direct and Interactive Marketing
• Jfr229_at_nyu.edu
• http//georgeruiz.tripod.com

Disclaimer This presentation does not represent
the actual views of Sprint PCS and the
presentation is the sole opinion of the author.
2
Presentation Outline

• Current Situation
• Background
• SWOT
• Objectives
• Marketing Strategy
• Action Programs
• Projected PL
• Controls
• Conclusion

3
Current Situation Sprint PCS

• First to build an all digital proprietary
  wireless CDMA network that is both scalable and
  reliable.
• Has a good market history of providing better
  quality products.
• Sprint users are three times the industry average
  at 21-25
• Boasts one of the best ratings for providing
  wireless applications for consumers and
  enterprise alike
• Total parent company revenues near 23 billion

4
Background Telecom Industry

• Wave 4
• Customer mobility Shifts marketing strategies
• Wireless data becomes a transparent access medium

• Wave 3
• Extending Location-based data
• e-mail, customization,

• Wave 2
• Consumer content
• News, weather, sports, stocks

Wireless Data Penetration

• Wave 1
• Early adopters
• Mobility critical to business

2005
2001
Late 80s
1999
Reach
Richness
5
Background Telecom Industry

• U.S. mobile consumers will rise from 5 million to
  65 million by 2004 and the market size in 2005
  will be near 12 billion (Gartner).
• This might look like a large number, but other
  countries already boast over 60 of total
  population owning at least one mobile phone.
• The U.S. adoption curve is currently at 7-10
• PDAs have a 70 lead in wireless penetration and
  will lead as the preferred enterprise wireless
  unit.
• Currently, only 2.3 of less than 1 million
  telecommuters access email through wireless
  devices out of the total population opportunity,
  which is 42 million.

6
Background Customer Adoption Process

• Technological productivity has led to an increase
  in faster, better, stronger communications
  devices, but the adoption rates remain the same.
• Yet companies are not communicating the right
  message. New technology will typically be adopted
  by the early adopters. Why not focus that
  message?

Mass Market 50
Technology Adoption Gap
Customers
Mature Adopters 25
Early Adopters 25
Fig. 1.1 Technology Adoption Process
Time
Crossing the Chasm
7
Most Important Issue facing the Product Line
Handset Quality

• It all comes down to this one simple fact
• Customers do not care about the technology, they
  just want a reliable mobile phone that works
  well, has good reception, good battery life, and
  if it has other useful functionalities- Great!

Sprints current product mix
8
SWOT Analysis Opportunities and Threats

• Opportunities
• Little differentiation across handsets, services
  and product offerings leads to a high rate of
  customer defections
• Bad competitive campaigns across the industry
  have confused the customer.
• There is little organizational preference between
  operators and manufacturers to specify handsets.

• Threats
• Sprint is still a market follower. It may have
  the only all-digital CDMA network in the U.S.,
  but it does not have the resources that ATT
  wireless does.
• It is very expensive to bring integrated
  telecommunications products to the market.
• More importantly, U.S. customers are not used to
  paying for content.
• Asking customers to upgrade to new, expensive
  handsets might require a lot of convincing.

9
SWOT Analysis Strengths and Weaknesses

• Strengths
• Sprint is the only carrier to build the first
  all-digital network from the ground up.
• The strong partnership with Qualcomm allows
  Sprint to order handsets to specifically work
  better on their network.
• In the business enterprise services side, Sprint
  holds several prominent contracts that bring in
  revenue.

• Weaknesses
• Allowed Cingular to strike deals with RIM and
  with Palm to provide their respective wireless
  networks. Cingular now virtually leads the space
  for mobile PDA use.
• Relies too much on business contracts to generate
  cash flow and their business units seldom work on
  joint projects.

10
Goals of the Marketing Campaign

• The main objective is reinforce Sprints position
  in the market placer as a leader in mobile
  handsets and wireless communications.
• Integrated media campaign
• Two new product offering e-mail/web access with
  unique features of
• Digital photography
• location services.

11
Campaign Analysis

• Target Demographic
• Able income consumers 18-30
• media savvy
• suited for mobile communications.
• Own PDA, and a mobile phone over a year old with
  an average monthly phone bill of 50.
• Unique Selling Proposition
• Emphasize how only this product solves or
  fulfills a need!
• On the go pictures
• Always on access to rich localization
  information

• Success Metrics
• Increase in market share in early adopters
• Increased brand awareness for product across
  media
• Redefinition of handset/service expectations in
  the marketplace
• Increase in ARPU through higher volume usage of
  data driven services
• Target acquisition is 60,000 customers for the
  first year with profit targets for 3 years at 5,
  15, and 20 percent respectively.

12
Campaign Analysis

• Acquisition
• Skim top 30 of customers and early adopters
• Convert dissatisfied competitor customers
• Offer unique product mix to clearly differentiate
  from competition
• Retention
• Loyalty programs (the more you stay, the cheaper
  it is)
• Service upgrade trials
• Lifetime Value segmentation
• Increase breath of quality 3rd party content
  providers
• Engage opt-in feedback campaigns for complete
  customer interactivity

13
Product and Service Customization Matrix
GE
Nokia
Sony/Ericsson
Samsung
Sanyo
Kyocera
Handset
99.99
149.99
249.99
299.99
Pricing
79.99
Emergency Services
Photo-mail
GPS/ location Content
Entertainment Content
Enterprise Solutions
Service
Web e-mail
1st month free For premium services
Family Plan 75-50-50
Referral Discount
Upgrade handset
Cross-Sell Offers
720 possible custom configurations!
Sanyo? 299.99? Photo-Mail? 1st month free
Nokia? 99.99? Emergency Services? Family Plan
Better positioned to establish customer database
profiles and personalization!
14
Profit correlation to customer value
200
150
100
50
0
-50
-100
Top 10
2
3
4
5
6
7
8
9
Bottom 10
Generally, your top 20 to 30 of customers will
generate the majority of your sales!
MVC Most Valuable Customers
MGC Mass General Customers
LVC Least Valuable Customers
15
Competitive Analysis

• ATTs upcoming mMode service is an Americanized
  version of NTT Docomos successful mobile content
  service.
• Cannot imitate, so differentiate by what makes
  Sprints products successful technology, people,
  and services!

16
Timeline

• Integrated media Campaign will run over a
  12-month period and each media vehicle will be
  implemented over a 3-month period.

12
17
Projected Financials

• Media Plan
• Profit/Loss
• Life-Time Value
• Retention
• 3 Year PL
• Operational Budget

18
Media Plan
19
Lifetime Value
20
Retention
21
3 Year Profit/ Loss Statement for handsets only
22
3 Year Profit/ Loss Statement for handsets and
services combined
23
Operational budget
24
Overall Campaign Control Process CTR Concept To
Reality
Build
Implement
Design
Cost
Test
Control
Time
25
Thank You!

• George Ruiz
• New York University
• Direct and Interactive Marketing
• Jfr229_at_nyu.edu
• http//georgeruiz.tripod.com