Marketing Strategies for Cell C

MARKETING PHILOSOPHY AND COMPETITIVE MARKETING STRATEGIES FOR CELL C

It has been argued that "strategic marketing planning can be viewed as the solution to multitudinous issues which face modern management" (Haris, 1996). Indeed, it is often contended that the process of strategic marketing planning is crucial since planning determines what must be done in the future whilst giving an opportunity to test what has been achieved against the framework of the existing plan. However, it is universally acknowledged that not only is planning far from simple but also that few organizations plan well (Piercy, 1997).

As Cell C, we intend using our marketing plan as a road map, to plan our course and help us reach our goals/destination. Typically a marketing plan should consist of information about the company and its products or services, marketing activities, objectives and strategies, and its method for measuring success. It should also have a designated time period (i.e. 6 ? 12 months) and one should document the costs of the planned marketing activities. (after D.K Schofield ? De-mystifying Marketing plans)

MISSION

"A company must get to the future not only first but also for less." (HBR G. Hamel & C.K. Prahald) As Cell C is the third mobile operator in South Africa, this poses a tough challenge, but we believe we 're up for it, and we intend being First on innovation and Customer Service. Our goal is "competitive innovation not competitive imitation" (adapted from STRATEGIC INTENT ? C.K. Prahalad &

G. Hamel)

The marketing strategies for Cell C are focused on meeting the needs of our future customers, and keeping them met. We plan to achieve this through the provision of world class service and innovative products at competitive prices.

MARKETING OBJECTIVES

To realise (win over) 15 ? 20 % of existing cell phone users.

To attract new users from all spheres, in particular the under serviced areas i.e. rural and semi-urban communities.

To create a visible profile through an explosive branding campaign.

"BUY - CELL C"

To be able to offer customers the option of a 1 year contract, and still make a profit. (presently the two players in the market only offer 2 year contracts)

FINANCIAL OBJECTIVES

Having seen that over the past year our competitors, Vodacom and MTN have attained returns on capital invested of 41 % and 27 % respectively, we will be aiming for a return of 20 %.

TARGET MARKETS

Existing customer Base

An estimated 90% of annual market net additions are now prepaid, a trend that is expected to continue.

The number of prepaid subscribers has increased more than 200% in the past year and is expected to rise still. (After MTN Disruption 2 presentation)

Intended target areas/methods

Taxi drivers for distribution of prepaid airtime cards etc.

Individuals in rural and semi-urban communities/settlements.

Children under 12 years (wrist watch phone ? assuming the technology is available)

Industries needing to keep "track" /contact with their drivers for instance. (wrist watch phone)

RESEARCH

Profile of the Cell Phone user

LSM GROUP

Age group

Preferred Cell phone

Reason for choosing network

What would influence you to change providers?

Vodacom

? Nothing

? Cost - lower tariffs and discounts by another provider, better rates

? Promotions

? A better offer, good deal, benefits

? Continuous network problems

? Better service (from another provider), bad service from Vodacom

? Extended time for free minutes

? Free itemised billing and caller recognition

MTN

? Better call rates or a much better phone for free with a similar package

? Better/ value-added services

? Better package, price, phone I get

? Better deal or offer

? Price increase (by MTN)

? Affordability, cost

? Duration of contract, "Two years is quite a long time to sign into"

? Quality of network

? "?if my cell wasn 't network locked"

POSITIONING

Cell C offers a unique international professional team who 's analysis of the changing market environment will help to develop the strategic goals to ensure that Cell C will survive. These will offer the benefits of:

Knowing the direction

Awareness of the business environment

Forward thinking habits.

Enforces greater intra-organisational and external dialogue.

A process of making a systematic and critical review of the business.

A focus on priorities

A consideration of strategic alternatives

Cell C will have primarily an African image. Giving the people of Africa the kind of products and services that they need.

MARKETING MIX

We believe that in order to put even a slight dent in the marked we need to be aggressive in our marketing attack. "we can proceed with the implementation of our aggressive cellular network rollout, paving the way for us to introduce innovative new competitive service and product packages designed to further expand mobile telephony to the mass market". T. Laham Cell CCEO

Our intention is to use a combination of marketing concepts in order to have the best impact i.e. Product concept, production concept and the market concept.

Product concept

To be in a position to offer cell phones and contracts that are in high demand but at the lowest possible price.

Production concept

To be able to offer unique products and offer the best quality and performance (on the 1800 Mhz spectrum.)

We will find out what it is the customer wants and ensure that we give it to them in that way we will ensure customer satisfaction.

Market concept

Customer orientation ? The key to customer retention is customer satisfaction. We subscribe to the belief that perceived benefits go beyond product performance, to service quality, company image, sales service and relationships. (after A. Arbee & K. Naidu, Marketing Management)

Collaboration ? We believe that it is the mandate of all employees of Cell C to undertake in the marketing of the company, after all if the marketing exercise fails Cell C fails.

Competitive Advantage ? We are planning to build the reputations of and maintain successful brands, in this way ensure customers confidence in the brands ensuring repurchases.

PRODUCTS AND SERVICES

We will offer all the products our competitors offer but at a more competitive price.

We will offer a 1 year contract to subscribers as opposed to the two year contracts offered by our competitors. (This will be accompanied by a free Siemens phone to the value of +/- R600)

We will introduce a wristwatch phone (assuming that the technology is available) ? this will be marketed to children as well as in industry. The watch / phone will have two buttons, an answer key and a Hang up key, these will double up as pre-programmed dial buttons. (maximum of two numbers pre-programmed into the watch) I.e. a child needing to call mom to fetch them will push the pre-programmed button and this will automatically dial mom. Companies could avoid those "private call" cell phone bills and still keep in touch with their drivers for instance.

We will offer better connectivity and speed for data connection on the 1800 Mhz spectrum.

COMPETITORS

We believe it to be of utmost important to be aware of what our competition has done, and are planning to do. Not only do we have to match what they 're doing but we have to do it that much better and faster.

MTN Overview

MTN ranks as one of the largest GSM networks in the world with operations in Africa (Rwanda, Swaziland, Uganda and bidding for licence in Nigeria?) and has roaming agreements with 153 networks in 76 countries.

In September 1999, M-Cell acquired Orbicom, the largest provider of satellite services in Africa. The company distributes digital signals and manages value-added networks across Africa.

The brand has established many world records in performance, including

? judged among world 's top three GSM operators (Financial Times London)

? product innovation (1st Prepaid in SA, Faxmail, global SMS on internet)

MTN is pro-actively channeling resources towards the development of previously disadvantaged areas:

? connecting more than 300 communities to the most modern form of communication

? job creation, skills development and economic empowerment through Community Payphones Programme

Vodacom Overview

Vodacom started operations during 1994, thus becoming SA 's first network operator

It attracted 50 000 subscribers within the first month (June), the number rising to 100 000 by October of the same year.

Today Vodacom owns the majority share of the market (approx. 55%) and services some 3,6 million customers

Vodacom has won awards for Advertising, Marketing, Corporate Social Investment, amongst others,PMR Golden Arrow and SA non-listed company of the year

Vodacom is however considered a follower, providing products and services in response to MTN 's innovation

? Vodacom Corporate Structure

Vodacom Group (Pty)Ltd shareholders are Telkom SA Ltd - 50%; Vodafone Airtouch Plc - 31,5%; Rembrandt Group Limited - 13,5%; and HCI - 5%

(After MTN Disruption 2 presentation)

? Global mobile phone sales have shot past the total number of PCs sold

? Mobile handsets have potential to become the most dominant device linked to the internet in the future

? The implications:

? more people will have access to the internet as cellular is cheaper than PC

? value added services will become more and more of a competitive edge

? more specialization by service providers thus cutting down on customer confusion and finding own niches, e.g.

References

Haris, 1996, Piercy, 1997 adapted from article posted on Gmarketing website. Written by J. C. Levinson

"De-mystifying Marketing plans" G marketing. D.K Schofield

"Competing for the future" Harvard Business Review, July /August 1994-

G. Hamel & C.K. Prahald

"Strategic Intent" Harvard Business Review, May/June 1989 - C.K. Prahalad &

G. Hamel

"Marketing Management" A. Arbee & K. Naidu, Book 1 Marketing Pilosophy and Strategy. 2001/2 edition

References: Haris, 1996, Piercy, 1997 adapted from article posted on Gmarketing website. Written by J. C. Levinson "De-mystifying Marketing plans" G marketing. D.K Schofield "Competing for the future" Harvard Business Review, July /August 1994- G. Hamel & C.K. Prahald "Strategic Intent" Harvard Business Review, May/June 1989 - C.K. Prahalad & G. Hamel "Marketing Management" A. Arbee & K. Naidu, Book 1 Marketing Pilosophy and Strategy. 2001/2 edition