Marketing for Telecommunications Operators Projects
Sergio Cruzes MBA in Project Management and Technological Innovation – FIPE USP MsC in Electrical Engineering – EESC USP PMP certified
Table of Contents
Table of Contents ................................................................................................................ 2 1. INTRODUCTION ...................................................................................................... 3 2. CONTEXT .................................................................................................................. 4 3. END USERS ............................................................................................................... 5 4. BROADBAND OFFERINGS .................................................................................... 7 5. MACRO ENVIRONMENT........................................................................................ 8 5.1 Social and Cultural environment .............................................................................. 8 5.2 Demographic environment........................................................................................ 8 5.3 Economic environment ............................................................................................. 9 5.4 Technological environment .................................................................................... 9 5.4 Political environment ............................................................................................ 11 6. INTERNAL MICRO ENVIRONMENT .................................................................. 12 7. KEY SUCCESSES FACTORS ................................................................................ 13 8. BUSINESS SUMMARY FRAMEWORK ............................................................... 14 9. BUSINESS CONCEPTION ..................................................................................... 15 9.1 Business Plan Definition ......................................................................................... 15 9.2 Strategic Planning ................................................................................................... 16 9.3 Purpose of the Organization: Vision, Mission, Believes & Values, and Objectives ....................................................................................................................................... 18 9.4 Generic Competitive Strategies .............................................................................. 19 9.5 Marketing Strategy.................................................................................................. 20 9.5.1 Marketing Plan Definition ............................................................................... 20 9.5.2 Market Segmentation ....................................................................................... 21 9.5.3 Marketing Mix ................................................................................................. 23 10. REFERENCES ...................................................................................................... 25
Acronyms and Abbreviations 2G 3G AAA ADSL/DSL ARPU BTS BWA CAGR Capex CDMA CPE CRM DOCSIS DSL EVDO FTTH Gbps GSM HSPA IBGE IEEE IMS IP IPC IPTV LTE MIMO MMDS OFDM OPEX PC PMP QoS RAN SLA VDSL VoIP xDSL WBS WiMAX
Second-generation mobile network technology Third-generation mobile network technology Authorization, Authentication and Accounting Asymmetric Digital Subscriber Line Average Revenue per User Base Transceiver Station Broadband Wireless Access Compound Average Growth Rate Capital Expenditure Code Division Multiple Access Customer Premises Equipment Customer Relationship Management Data Over Cable Service Interface Specification (Cable Modem) Digital Subscriber Line Evolution Data Only Fiber to the Home Gigabits per second Global System for Mobile Communications High-Speed Packet Access Brazilian Institute of Geographic and Statistics Institute of Electrical and Electronics Engineers IP Multimedia Subsystem Internet Protocol Potential Index of Consumption Internet Protocol Television Long Term Evolution Multiple-Input Multiple-Output Multichannel, Multipoint Distribution System Orthogonal Frequency Division Multiplexing Expended Costs Personal Computer Price per Megahertz per Pop Quality of Service Radio Access Network Service Level Agreement Very High Bit-rate Digital Subscriber Line Voice over IP any type of DSL Work Breakdown Structure Worldwide Interoperability for Microwave Access
1. INTRODUCTION This job consists in providing the factors that influence the marketing activities concerned with new projects in Telecommunications Operators. It is the marketing related to the strategic planning of the organization. The study begins with the analysis of the micro-environment followed by macro-environment analysis. Other factor to be analyzed is the technological environment that concerns with the availability of user devices.. On the legalpolitical environment, aspects such as spectrum availability and restrictions should be considered. Keywords: Marketing ♦ Strategic Plan
2. CONTEXT The service growing rate of circuit switching telephone systems is starting to decrease in Brazil and Latin America. So, Telcos are investing in fixed broadband access technologies which are showing high growing rates. Also, Cellular operators are also noticing a decreasing on their growing rates for voice services. At the same it is very difficult to provide differentiated voice services. The price competition is one main drivers of the voice revenue stagnation. For most cellular operators in the world, the mobile data revenue has reached more than 30% of the service revenues while in Brazil there is still room to grow.
3. END USERS For the end-user media consumer, the open TV main content provider in Brazil. However it is beginning a trend to search for different forms to access content , entertainment or information, at devices such as PCs and mobiles. The group of users that is constantly searching for information on different channels other than TV, is composed of persons under 35-year old (Accenture study published at Converge Magazine in 13/April/2009). A study done by Yankee Group and Ericsson shows that the 3G user in Brazil is predominantly young (Teletime news, 29/July/2009).
The social classes in Brazil are distributed as per Exhibit 5.1 (source: Associação Brasileira de Pesquisas, 2009) Family average income per month (Reals) 16000 14000
14400
12000 10000 8000
8100 4600
6000 4000 2000
2300 1400
950
620
440
0 A1
A2
B1
B2
C1
C2
D
E
Exhibit 3.1 – Social classes in Brazil and family income per month
Based on a report of the Exame magazine (08/April/2009) about the consumption of the Brazilian families and IBGE information, it can be derived that the social classes in Brazil are distributed as per Exhibit 5.2.
30,00% 25,40%
25,00% 20,70%
21,80%
20,00% 15,70%
15,00%
Percentagem Brasil 8,90%
10,00% 4,10%
5,00%
2,60% 0,90%
0,00% A1
A2
B1
B2
C1
C2
D
E
Exhibit 3.2 – Social classes percentage in Brazil
In order to better estimate the total potential users based on income salary, the table 5.1 simplifies the number of classes. The total potential number in Brazil is 15,789 thousand users.
Classes
Percentage of the Brazilian population
People between 20 30 years old
Wireless internet (potential)
Potential users
A and B
29.60%
11,248
85%
9,560.8
C
42.50%
16,150
30%
4,845
D and E
28.00%
10,640
13%
1,383.2
Table 3.1 – Potential internet users in Brazil based on the income salary
4. BROADBAND OFFERINGS The cable modem access reaches only 184 cities representing 74 million people, or 40% of Brazilian population which represents 53% of total Brazilian consumption in accordance to the IPC/Target. While the broadband competitiveness is so tough, the end user has few choices. The leader subscription service is called Speedy (from Telefonica and it is present only on the state of São Paulo). The exhibit 4.1 depicts the main fixed broadband offerings in 2009.
Fixed Broadband Operators (in thousand subscribers) 2500
2460 2120
2000
1920
1762
1500
1320
1000 402
500
80 0
Telefonica
NET
Oi
Brasil Telecom
CTBC
GVT
TVA
Exhibit 4.1 – Fixed Broadband Operators in 2009
An
analysis
done
by
IDC
in
July
2008
(published
at
www.puccamp.br/servicos em 06/07/2009), provides the broadband access prices in Brazil. The average price of minimum throughput (128 Kbps) was US$ 30. In Argentina, 512Kbps was US$ 27.05.
5. MACRO ENVIRONMENT As per KOTLER (1995, p. 49), the macro environment consists of the forces that affect the whole micro environment: demographic, economic, technological, natural, political and cultural.
5.1 Social and Cultural environment The cultural characteristics of the areas to be serviced by a wireless broadband business are very non-homogeneous.
The service should be
segmented during the implementation phase only. The final goal is to provide a service that is not focused for specific population profiles .
5.2 Demographic environment
The demographic environment is a very important force since it consists of the population profile in terms of its age, ethnics, immigration, education level, lifestyle, etc.. As these trends are out of control of the company, it is important to anticipate the movement of the trends, to develop scenarios and to provide a constant adjustment on the market strategies. The observation of the demographic environment trends allow to develop geographic, ethnics, income salary and age segmentation strategies. The
geographic
segmentation
is
extremely
important
for
a
Telecommunication Operator deployment project. It allows identifying areas with great growth potential and low level of competition. It is on these areas that the deployment should start.
5.3 Economic environment
The main implications of future changes on the economic environment are related to the demand. The demand is very sensitive to the variations of the economic activity and any well defined plan may fail if it ignores the influence of the economic environment. Brazil, which has the fifth greater population and the eighth consumer market in the world, it is becoming one of the best options for business in the world. The internal market growth and the continuous class C expansion have boosted the consumption in Brazil. As per magazine Exame (08/April/2009), the Class C spends its income salary as: •
21% at commercial establishments (supermarket, drugstores)
•
11% with transport (bus, subway, gasoline, taxi)
•
10% with food (restaurant, groceries, snack bars)
•
8% with entertainment (gifts, sightseeing, internet)
•
7% with basic services (telephone, light, water, house rent)
Based on this scenario, it is expected a high demand of broadband services on the next years.
5.4 Technological environment At highly competitive segments, the technology is a key determinant factor for the business continuity.
The innovations which aggregate product and
service value affect the end user perception, creating a maximization of the cost benefit and an increase on the competitive advantage.
The main deployed technological solutions to offer broadband services in Brazil is the UMTS with its HSPA platform. Other mobile technologies that offer wireless data are GPRS and EDGE from GSM networks and 1xRTT and 1xEVDO from CDMA networks. MMDS operators also offer wireless internet (radio connection). The mobile broadband HSPA is the dominant technology. If we consider the UMTS cellular phones
and 3G data devices, they represent 96% of 3G
accesses in Brazil (source: Teleco). Regard the fixed telephone market, the operators are updating their ADSL networks with ADSL2, ADSL2+, VDSL and also are beginning to deploy the FTTH technology. The Exhibit 5.1 depicts a performance comparison among different technologies Access Technology
Mode
Peak Throuput Downlink
Reach
WiMAX* 3,5 GHz - 5 MHz bandwidth FDD
Wireless Fixed
15 Mbps
<1.0 km (urban area)
WiMAX* 2,5 GHz - 5 MHz bandwidth TDD WiFi (802.11a/b/g) ADSL ADSL2 ADSL2+ VDSL FTTP (BPON-ATM) FTTP (EPON-Ethernet) FTTP (GPON-Ethernet/GEM) FTTP (GPON-Ethernet/GEM)
Wireless mobile Mobile Fixed Fixed Fixed Fixed Fixed Fixed Fixed Fixed
10 Mbps < 54 Mbps 8 Mbps 12 Mbps 24 Mbps 50 - 100 Mbps 622 Mbps 1.250 Gbps 1.244 Gbps 2.488 Gbps
<1.25 km (urban area) < 0.1 km 3 km 1.5 km 1.5 km 0.4 km 20 km 20 km 20 km 20 km
EVDO* rel A - 1.8/1.9 GHz 1.25 MHz bandwidth
Wireless mobile
3.1 Mbps
<1.7 km
HSPA* 1.8/1.9 GHz - 5 Mhz bandwidth
Wireless mobile
14.4 Mbps
<1.7 km
HSPA+* 1.8/1.9 GHz - 5 MHz bandwidth
Wireless mobile
28 Mbps
<1.7 km
Exhibit 5.1 – Technology performance comparison among different technologies
* Reach refers to a throughput that is less than the peak value
5.4 Political environment The political and legal environment is composed of laws, government agencies and pressure groups that influence and restrict the actions of the companies. The political environment provides great restriction over the organizations and individuals. In July 2009, Anatel proposed a smoothly reduction on the TV operators frequencies in the 2.5 GHz band. The proposal consists in reducing the available spectrum from 190 MHz to 70 MHz in 2012 and from 70 MHz to 50 MHz in 2015. To start a WiMAX operation, 50 MHz may be enough. But 50 MHz of spectrum eliminates any possibility of expansion. It may be possible one or two operators in the same region with 25 MHz of spectrum without considering the band guard that may reach 5 MHz. In Portland, USA, Clearwire started its operation with 30 MHz of band and can increase the spectrum usage until 120 MHz (source: Teletime magazine, August 2009). The great movement on this area was the TVA acquisition by Telefonica in the cities of São Paulo, Rio de Janeiro, Curitiba and Porto Alegre. It is commented that Telefonica paid between R$ 1 billion and R$ 1.6 billion and that most part of this value was due to the acquisition of the spectrum which is currently used by MMDS operation (2.5 GHz range).
Recently Telefonica
acquired Vivo which means that their interest on WiMAX may not exist anymore. Anatel intends to use the 2.5GHz spectrum with services such as LTE. The 3.5 GHz spectrum range is another band to be used for WiMAX. There are few operators on this range such as Embratel (whole country license), Brasil Telecom (license for 12 ANs), Grupo Sinos (AN RS1), Neovia (DirectNet) in the state of São Paulo, and WKVE (6 ANs in the states of Minas Gerais, Espírito Santo and Bahia).
6. INTERNAL MICRO ENVIRONMENT The internal micro environment considers the resources, capabilities and the essential competencies of an organization which although they do not provide an intrinsic value, they represent value when seen by the possibility of generation of competitive advantage for the enterprise, providing return on investment above the average (CECCONELO e AJZENTAL, 2008 p. 114). The deployment and operation of a Broadband network require diverse and different competencies of human resources and also from the organization. The competence of an organization represents the summation of the learning of all groups of abilities both at personal level and organizational level (Hamel ePrahalad (1995, p.233). Basically the competencies required to deploy and operate a Broadband network are: •
Knowledge and experience with radio-frequency engineering (it requires knowledge and experience with propagation, network design, antennas, etc). The challenge is to design a network to meet day one requirements as well as future requirements
•
LTE technology knowledge on both access and core sides
•
Cellular network deployment experience
•
Experience in site acquisition and site sharing
•
Technological group to evaluate infra-structure equipment as well as device hardware
•
Experience in network operation,
CRM, IP, billing, security and
services •
Marketing experience: coverage area segmentation and priorities, traffic estimation and growth prediction, business models, subscriber packages positioning, competitors knowledge
As already commented on this paper, the content is the crucial part of the wireless broadband business. Users are not only interested on the broadband pipe. They want the applications and services that the broadband can provide. This means that the broadband provider needs to do partnerships with content distributors and also brings to the market the more advanced end-user devices.
7. KEY SUCCESSES FACTORS The business and competitor knowledge will allow determining the key successes factors which are the minimum requirements that are necessary for a enterprise to compete with possibilities of success. Based on literature, it is known that main success factors for a Broadband network operation are the availability of Modems for fixed networks, laptops, smartphones and tablets for wireless networks and also service price and the cost of the backbone access to internet for any type of network. Regarding the project deployment, the main success factors are the choice of an infra-structure provider totally engaged with the technology. Also, it is very important to minimize the number of additional providers for IP network, BTS backhaul, data servers, civil infra-structure, site acquisition. Other important success factors are definition of site priorities; maximize site sharing options, and a presence of a very skilled deployment team.
8. BUSINESS SUMMARY FRAMEWORK In accordance to CECCONELLO and AJZENTAL (2008, p. 134), it is important to aggregate all related information that concerns to the business plan in a table in order to make available a qualitative and quantitative summary about the aspects that can and cannot interfere directly or not directly in the business that is being proposed. The elaboration of this frame intends to bring to the table an integrated view about different existent variables that are pertinent to the proposed business, pertinent to the definition of the business and to the generic and marketing strategies.
9. BUSINESS CONCEPTION The goal of this chapter is to provide a base foundation for, given the opportunities analysis, to structure and develop a strategic proposal for , in the sequence, to verify its viability.
9.1 Business Plan Definition The business plan is a tool in which the entrepreneurs employs it in order to detail their ideas in a concise way based in assumptions of quality where it is demonstrated its viability and the probability of the business success. In accordance to Chiavenato (2005), the business plan consists of an anticipated planning in which the entrepreneur, based in a collection of data and information about a business, try to make it viable Business plans are needed at different scenarios. They can be used to expand a manufacturer plant, to verify the viability in attending a new market, to manufacture a new product, to offer a new service. This study will show a business plan for a new business. This plan has as the first goal to dissolve doubts for a possible decision maker about the quality of the plan In accordance to CECCONELLO and
AJZENTAL (2008, p. 146), the
challenge of every business plan is to identify precisely the reasons that suggest its elaboration. The reasons can be understood as the characterization of a problem motivated by the uncertainties about the viability of the business. The economic- financial analysis will reflect the verification of the hypothesis and variables concerned to the problem under study. In order to obtain a very trustful and solid economic-financial analysis, it should be necessary to perform an exploratory research that connects trends and correlations with the observed facts in the environment of the business.
9.2 Strategic Planning It is seen that there is a kind of difficulty to define the planning function in the enterprise world, to define its real magnitude and reach (OLIVEIRA, 2007, p. 3). Steiner (1969, p. 12) defined five dimensions non-reciprocally exclusive and without very defined borders of the planning: • Subject of interest: manufacturing, research, new products, finance, marketing, installations, human resource, etc. • Planning elements: intents, objectives, strategies, politics, programs, budget, standard, procedures, etc. • Time dimension: long-term, medium-term or short-term • Business unit: corporate planning, business unit strategy planning, affiliate planning, functional groups planning, division planning, department planning, product, services, etc.. • Characteristic: complex or simple, quantity or quality strategic or tactic planning, public or confidential, formal or informal, expensive or non expensive So, the planning is defined as a process based on the five shown dimensions, done to reach a future scenario in more efficient and effective way, using optimized efforts and resources from the organization. In accordance to SLACK et all, (2002 p. 87), strategy is the global standard of decisions and actions that position the organization on its environment and has the mission to make it reaches its objectives of long term run. These decisions will take place before, during and after the elaboration and deployment of the plan. The planning can be distinguished into three types: strategic, tactic and operational.
According to OLIVEIRA, (2007, p. 17), the strategic planning is the administrative process which provides marketing sustentation in order to establish the best direction an organization should follow, aiming an optimized level of interaction with the external factors - non manageable – and acting in an innovative and differentiate way. According to FISCHMANN and ALMEIDA (1991, p. 25), strategic planning is an administrative technique which based on the organization environment, it creates the conscious
of the opportunities and threats, strengthens and
weaknesses of the organization for the accomplishment of its mission. Based on this conscious, it is established the purpose of the direction that the organization should follow in order to take advantage of the opportunities and avoid risks. According to OLIVEIRA (2007, p. 18), the objective of the tactic planning is to optimize the results of determined area of the organization. So, it works with the decomposition of the objectives, strategies and politics that were established in the strategic planning. It is developed by the intermediate management levels of the organization.
OLIVEIRA, (2007, p.19) defines operational planning as the formalization of the methodologies of development and deployment of specific results to be reached by the functional areas of the organization. The subject matter of this work is the supply of wireless broadband services and contents with an objective of return on investment in seven years. The scenario that is expected for the next years (2011 – 2015) is characterized by a sustainable economic growth (better than 4% a year). The increase in the power consumption of the population will stimulate the appearance of new services and increase the dispute among cellular operators, internet via Cable Modem and ADSL service providers.
9.3 Purpose of the Organization: Vision, Mission, Believes & Values, and Objectives
According to CECCONELLO and AJZENTAL, (2008, p. 149), the purpose of one organization gathers vision, mission, believes & values, and objectives, which help the arrangement of the organization. These aspects are important in order for the entrepreneur to build the identity of its business, establishing the organization climate, the standard of behaviors to be followed, what is really being pursued on its business. According to OLIVEIRA, (2007, p.65), the vision is defined as the limits that the owners and main executive people can visualize within a certain period of a longer time and one wider approach. Within this context, the vision provides a solid outline of the strategic planning to be developed and deployed by the organization. The vision represents what the organization intends to be. According to OLIVEIRA, (2007, p.107), the mission is the reason of being of the organization.
Therefore, it tries to find what is real business of the
organization, why it exists, what activities the organization will concentrate in the future. According to OLIVEIRA, (2007, p.67), the values represent a set of foundations and fundamental beliefs of an organization, and at the same time they provide sustentation for all your main decisions. The values should have a strong interaction with ethical and moral values of the organization. According to OLIVEIRA, (2007, p.141), the objective may be defined as a state, situation or a future result that the executive intends to reach. It relates to everything that implies in obtaining a final result. Objective is a target with a defined execution deadline and assigned responsibilities. According to OLIVEIRA, (2007, p.141), the objective may be defined as a state, situation or a future result that the executive intends to reach. It relates to
everything that implies in obtaining a final result. Objective is a target with a defined execution deadline and assigned responsibilities. According to CECCONELLO and
AJZENTAL, (2008, p. 155), the
objectives show a more quantitative approach of the company goals, on the revenue, market share and profitability sides. Four our business plan, there are: • Vision: innovate and offer entertainment, information and communication at any place • Mission: provide excellence in content services • Main objective: reach 360 thousand subscribers within five years
9.4 Generic Competitive Strategies
According to OLIVEIRA (2007, p. 181), strategy is defined as a path, or way, or a defined and appropriate action to reach, preferably in a differentiate way, the goals, the challenges and established objectives, in a better positioning of the company in front of its environment.. The strategies may be defined in accordance with the situation of the company, it may be related to the survival of the company, growing or development . Porter (1996) identified three generic competitive strategies which a firm can face and tackle the competitive strengths of the industry in which the firm acts: cost leadership strategy, level of differentiation, and scope of target market or approach. These strategies are defined below: •
Cost Leadership: this strategy aims to obtain a cost structure that
is lower to the firm’s competitors, allowing it to obtain a great revenue volume. The firms that adopt this strategy need to minimize costs
by controlling
administrative, marketing, distribution, research and development, human resources costs etc..
•
Differentiation: the firm distinguishes its products in way that they
are noticed as unique on its industry. The differentiation may be in the offer of products or services, on the deployed technology, on the delivery system, on the market process, on the brand, style, performance, post-sale support, etc.. •
Scope of target market: this strategy consists of concentrating the
efforts in a determined group of customers, in a product line segment or in a specific market. This strategy is based on the assumption that a firm is different when it better attends the needs of a specific market, or provide lower costs for this specific market or both things. For the proposed business plan, intends to be: •
Cost leader when compared to 3G systems. The differentiation
will appear as a consequence of the business. If a fixed wireline operator deploys this project, it will be the only company to offer fixed and mobile broadband access at the same time.
9.5 Marketing Strategy
The marketing strategy should be elaborated with the aim of reaching the purposes of the organization and or of the business. According to KOTLER & ARMSTRONG (1993, p. 367), the strategic plan defines the mission and general objectives of the firm. Each business unit should prepare its functional plans, including the marketing plan. If the business unit consists of so many product lines, brands and markets, it may be necessary to develop plans for each of them. The marketing plans may include product, brand and market plans.
9.5.1 Marketing Plan Definition
According to CECCONELLO and AJZENTAL (2008, p.161), the marketing plan integrates the interdependent elements of the marketing such as sales, product management, customer assistance, advertisement, merchandise, sales promotion, lobby, public relations, brand and distribution. The marketing mix
defines the strategic position of a product in the
market. It includes the four main variables that a firm can administer in order to implement its market strategy: Product, Place (distribution), Promotion and Price. According to CECCONELLO and AJZENTAL (2008, p.161), the marketing plan should be specific for product line, by market and by region and must be supported by the market research. The main objectives are to provide the executive board a concise and complete financial and marketing summary report containing the forecast result and objectives. The proposed business plan intends to provide: •
Executive summary: the broadband service will attend firstly the
urban areas where there are greatest fixed broadband subscriber density •
Current market situation is dominated by a great expansion of 3G
broadband subscribers. 3G system quality is still a issue (EXAME magazine report, 15/July/2009 p. 91) •
As described in the beginning of this work, there will be a great
demand for broadband services on the next years. This is the great opportunity.
9.5.2 Market Segmentation 1. Segmentation
Market segmentation consists of identifiable groups within a market: Benefit segmentation consists in dividing a market into groups based
on the different benefits that consumers seek on a product or service
(people that seek for low prices, others that seek superior quality, and others that seek service quality). Demographic segmentation consists in dividing the market into
groups based on age, sex, education, income, religion, etc.. Occasion segmentation consists in dividing the market into groups according to the occasion when the consumers get the idea, purchase, use the product (e.g.: passengers traveling by business, by leisure or emergency reasons Usage rate segmentation means in grouping persons based on their
usage rate: heavy, medium, light, and nonusers of a product. For instance, some people drink one cup of coffee per day (light users) while others drink five or more cups per day (heavy users). Life style segmentation
is a type of psychographic segmentation
which consists in grouping persons or diving a market based on preferences of their lifestyle (for instance high class people which consume imported cigars and use sport cars, people that enjoy outdoor life, etc) According to KOTLER (2009, p. 45), the market professional can concentrate its efforts into one or two segments and which of them receiving the appropriate consideration. 2.
Market Niche
KOTLER (2009, p. 45) defines niches as a group of small customers which show more defined characteristics, or a unique combination of needs. By concentrating in attending a niche provides some advantages, including the opportunity of knowing each customer in a more personal way, to face less competitors and sell services and products with a superior margin once the customers intend to pay more for the fact of having their specific needs attended.
3.
Local Market
According to KOTLER (2009, p. 47), the firms may identify smaller customer
groups
which
share
some
characteristics
and
offer
market
opportunities known as local market. Many companies provide customer databases which contain information about demography, previous customer purchase, preferences and other customer characteristics
Our business plan intends to: •
Use demographic segmentation: the network rollout will start in the high income areas and reach the suburban areas in a later date.
9.5.3 Marketing Mix
The marketing mix, also know as the 4P’s - product, price, promotion, and distribution (place) - translates into actions that should be performed in order to influence the buyer. As per CECCONELLO and AJZENTAL (2008, p.163), and
KOTLER
(2009, p. 126), the 4P’s are described as: •
Product: attributes of any good, service, idea, person, institution,
etc., which potentially has an exchange value. It is featured by variety,
quality,
design,
brand,
package,
size,
warranty,
reimbursement. •
Price: attributes that reflect the cost of the product to the consumer,
as the price itself, payment conditions, acceptance or not of credit cards among others. It includes price list, discounts, licenses, payment deadline, credit conditions.
•
Distribution (Place): is everything that relates to the distribution,
physical location and logistics to make the product arrives to the final consumer. It consists of channels, coverage, location, stock, transport. •
Promotion: is the active communication process of the attributes
and benefits of a product for the intended target market. It is characterized by sales promotion, advertisement, sales force, public relations, direct marketing.
KOTLER (2009, p. 127) considers the inclusion of two other P’s that are very important for the global market: politics and public opinion. CECCONELLO and AJZENTAL (2008, p.164) state that when a service is being offered, three more P’s may be added to the 4P’s: •
People: they are the individuals involved in the service delivery
(how they are trained, how they behave in the service delivery, etc..) •
Processes: consist of the activities that the individuals perform to
provide the service delivery •
Physical evidence: it is an element of the marketing mix which
customers can actually experience or visualize when they use a service, and which contributes to the perceived quality of this service. It is the place where the service is delivered (airplane, doctor’s clinic, etc) Our business plan consists of:
•
Product: wireless broadband and differentiated content
•
Establish a process where the service subscription may be completed in five minutes
10.
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