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Product Development Strategies

BACHELOR OF ENGINEERING (HONS) IN

Electrical & Electronics Engineering

A330MED Product Development Strategies COURSEWORK II

Students Names:

A.V Thushara:

4559762

M.K.K.R Mawella: 4559751

Lecturer Submitted on

: :

Mr. Chris Kariyawasam 30/05/2012

Word count excluding appendix - 5245

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Product Development Strategies

Declaration of originality
This report is our work and has not been copied in part or in whole from any other source where duly acknowledged. As such, all use of previously published work (from books, Journals,

magazines, Internet sources) has been acknowledged within the main report to the list of references at the end of the assignment report. This report is submitted in partial fulfillment of requirements of the award of Bachelor of Engineering (Hons) in Electrical & Electronics Engineering.

Copyright Acknowledgement
The joined copyright of this assignment report belongs to the Auston Institute of Management Ceylon Ltd., Colombo 03, Sri Lanka, The Coventry University, Coventry, United Kingdom, and us. (A.V Thushara & M.K.K.R Mawella)

Students Names: A.V Thushara M.K.K.R Mawella

Date: 30/05/2012

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Acknowledgement
First we would like to thank our parents for their guidance and financial support, for the help in studies and its success. We would specially like to thank Mr. Chris Kariyawasam (BBA (hons),
MBA, MCIM, CPM (Asia Pacific) for his support and guidance to understand the subjects and help

he has given us to complete this write-up. We would like to thank librarian for letting us to borrow subject related books and magazines, and furthermore our group specially would like to thank Mr. Malith Lowe for providing us internal marketing data of Sri Lanka Telecom Mobitel PLC. This report would not be successful without support of the Institute itself, so we would like to thank the staff of the Auston Institute of Management Ceylon Ltd. May Tipple Gem Bless you all!

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Abstract
Since the mobile network industry has been sophisticated with the introduction of high speed internet services competition has been doubling on a daily basis. Even through Mobitel was the first to launch 3.5Mb HSPA, internet technology to Sri Lanka in 2002 now the same technology and similar sort of technology is being used by competitors to offer an equal service to the customer and new customers are requiring a further speed much sophisticated internet service as it had become a part of day today life of a typical human being. During the time when 3.5Mb HSPA internet service was launch for the very first time there wasnt a gap between the growth level of internet service and demand level for high speed internet but according to the most recent researches it has been proven that, there is a gap has been created due to the high expectation of customer. Consequently the completion has now stared emerging stronger than ever before which simultaneously creates a new high speed internet service through which customers can experience browsing internet at a 28.1 Mbps. Since competitors such as Dialog, Etisalate and Airtel have the capability of making use of this opportunity its better to be reactive rather than being protective after competition exploits the available opportunity. This opportunity provides Mobitel with an extraordinary market growth as the need for a speedier internet service has started to bloom now. The existing 3,5Mb HSPA technology is the principle strength and the tool available for Mobitel to kick off the competition. Thus the following report looks at the introduction of new 28.1Mb HSPA technology to the existing internet market through a thorough evaluation of the strategies to used and resources such as finance, human and other physical resources which would be required to successfully launch the new service whilst identifying the key factors of barriers which may cause to the delay or failure of the entire project.

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Table of Content
1.0 Introduction ..................................................................................................................... 7

1.1 Existing product and service range ................................................................................... 9 1.1.1 SMART Pre Paid ........................................................................................................ 9 1.1.2 Post paid .................................................................................................................... 9 1.1.3 3.5MB HSPA Broadband............................................................................................ 9 1.1.4 SMART Pre Paid package ......................................................................................... 9 1.1.5 Post Paid Package ..................................................................................................... 9 1.2 Current market position ...................................................................................................10

2.0 Market Overview .................................................................................................................11 2.1 SWOT Analysis ...............................................................................................................11 2.2 Key issues and opportunities ...........................................................................................12 2.2.1 Issues .......................................................................................................................12 2.2.2 Opportunities.............................................................................................................12 2.2.3 Assumptions .............................................................................................................12 2.3 Objectives........................................................................................................................13 2.3.1 Corporate objectives .................................................................................................13 2.3.2 Marketing objectives .................................................................................................14 2.4 Strategies ........................................................................................................................15 2.4.1 Corporate strategies ..................................................................................................15 2.4.2 Growth strategy .........................................................................................................16 2.4.3 Segmentation, Targeting and Positioning ..................................................................17 2.4.4 Branding ...................................................................................................................21 2.5 Marketing Mix ..................................................................................................................23 2.5.1 Product/service .........................................................................................................24 2.5.2 Price..........................................................................................................................25 2.5.3 Distribution/place.......................................................................................................26 2.5.4 Promotions ................................................................................................................26 2.5.5 Sales Promotions ......................................................................................................26 2.5.6 Process .....................................................................................................................27 2.5.7 People.......................................................................................................................27 5|Page A330MED

Product Development Strategies 2.5.8 Physical evidence .....................................................................................................27 2.6 Financials ........................................................................................................................28 2.6.1 Expense forecast 2011/2012/2013 ............................................................................28 2.6.2 Sales forecast 2011/2012/2013 .................................................................................28 2.7 Implementation ................................................................................................................29 2.7.1 Tactical plan for the year 2012-2013 .........................................................................29 2.7.2 Promotional plan for the year of 2012........................................................................30

3.0 Marketing planning process ................................................................................................32 3.1 The role of marketing planning process ...........................................................................32 3.2 Importance of undertaking a marketing audit for the successful launch of M4 broad band internet ..................................................................................................................................36 3.3 Utilization of segmentation, targeting and positioning and their importance .....................39 3.3.1 Segmentation ............................................................................................................39 3.3.2 Targeting ...................................................................................................................41 3.3.3 Positioning ................................................................................................................42 3.4 Potential issues that may be encountered in implementation of the marketing plan and proposals to address them ....................................................................................................43

4.0 Conclusion ..........................................................................................................................47

5.0 List of References ...............................................................................................................48

6.0 Appendix .............................................................................................................................49

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1.0 Introduction
Mobitel We care always

As one of the leading mobile network providers in Sri Lanka Mobitel is the major business entity in the country which always being innovative with the latest approaches in all aspects. (Management, Marketing, HRM and in technology) Mobitel was initially started as a separate business unit namely MOBITEL solely governed by single management board with discrete infrastructure consists of staff, administration, market intelligence communication and quality assurance. In 2002 Mobitel merge with SRI LANKA TELECOM PLC as a growth strategy as well as defensive strategy to overcome the issues such as mentioned above the company was severely suffering from. It has growth in leaps and bounds and is now on par technologically with the very latest in the Sri Lankan telecommunication industry. AS a result of merge with SRI LANKA TELECOM PLC Mobitel derived the chance of expanding its business activities better than the other mobile networks providers in Sri Lanka and now its the 2nd largest mobile network provider in the island and the first to launch 3.5 HAPA technology in South Asia. This new diversification approach create a different story in mobile market since well sophisticated technology such as high speed 3.5 Mb GPRS service and video calls which were in operation in other parts of the world were ultimately launch here in Sri Lanka to give that unique and special service to mobile subscribers along with a better brand experience. However the company gives access to over 2 million customers in the country whilst generating an average turnover of 15 billion per year with an average 30% market share.

Figure 1 Market Share of Mobitel (Lanka Business Report 2011)

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Product Development Strategies Principal strategy is focusing on existing marketing and accelerating growth by increasing the customer base by both capturing new customers and encouraging competitors customer switching. Also innovation is a key factor for the success of where the company is today. New product / service launch namely 28.1MB HSPA high speed broad band internet service which has become a need, clearly shows a significant potential in the further, so the next business strategy is to exploit the opportunity which is identified under the audit, to reach the next year cooperate objective. By increasing the customer base the company will be increase the ultimate revenues and profitability.

Mission Statement To care, share & deliver

These are the 3 key ingredients in our relationship with: Our shareholder, our employees, our customer committing to these 3 principle as an individual and as a team and by regularly practicing it as an organization , we truly can car for our customers and deliver them the best service which will live up to their expectation.(Mobitel.lk 2012)

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1.1 Existing product and service range


1.1.1 SMART Pre Paid

Talk longer and SAVE with SMART Subscriber has the privilege of optional features: SMART Freedom suite of service, SMART Bonus loyalty discount, 3G Delight

1.1.2 Post paid Packages Cool Plus 100, Active F, SRIL, Double M Upahara, Senahase Upahara

1.1.3 3.5MB HSPA Broadband 3.5MB HSPA broad band high internet service provision

The customer base As the national mobile network provider Mobitel caters to all most all, of the customer based different criteria of segmentation, principally demographic and psychographic factors. Basically customer segmentation in Mobitel is done as depicted below,

1.1.4 SMART Pre Paid package Teenagers, young men and women in age groups from 18 to 30, low income profiles such as labors, frequently users of GPRS,

1.1.5 Post Paid Package High income profiles such as doctors & businessmen & government servants. 9|Page A330MED

Product Development Strategies

1.2 Current market position


The current broadband market is highly competitive as every company attempts to offer the service at the lowest price but since the quality has been a concern for subscribers a market for speedier internet service is emerging which has been identified under the audit. Currently Mobitel is one of the high speed broadband internet service providers with the highest quality and at the lowest rates catering to the mass market. The strength and weakness of the competitors have been stated in the audit under competitor strength and weakness analysis.

Figure 2 Current Market position of Mobitel (Annual Report 2010)

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2.0 Market Overview


The telecommunication market especially high speed internet market has been rapidly changing over the last 3 to 5 years. (lbr.lk 2012) Thats due to the main reason of infrastructure development taking place which is identified as an opportunity in SWOT. Since business has started to base upon internet online trading has become one of the major trends in the market so in order to cater to this market a higher speed internet is required which goes beyond subscribers expectation. Mobitel as a leading network provider focuses on exploiting the market available with the capacity if has which has been identified under the SWOT analysis,

2.1 SWOT Analysis

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2.2 Key issues and opportunities

2.2.1 Issues Resources are not available with the company plus inadequate budgets. Competition may not exploit the available opportunity. Customer base is not strong enough to cater.

2.2.2 Opportunities High speed internet market is still freely available. But potential is high as internet s likely to become a major need in communication in the future. Opportunity to increase companys profitability, revenue and ultimately market share. New potential market in northern & eastern provinces.

2.2.3 Assumptions There will be no changes in government and political environment will remain stable. Economy will remain growing in next 3 to 5 years with an average inflation and exchange rates. Competition may not exploit the high speed internet market in next 12 months. Communication will be a key issue with the development.

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2.3 Objectives
2.3.1 Corporate objectives

Increasing the share of market by 20% y increasing bottom by 25% by te end of 3rd year
2013. 1st year by 7% 2nd year by 15% 3rd year by 20%

Figure 3 Potential Mobile Market (TRC 2011)

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2.3.2 Marketing objectives Increase sales of broadband service by 25% then end of 2013. 1st year by 10% 2nd year by 18% 3rd year 25% Increasing customer base by 15%

Figure 4 Mobitel Customer Base (Annual Report 2010)

Increasing profitability by 25% per years

Figure 5 Expected Profitability (Annual Report 2010)

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2.4 Strategies
2.4.1 Corporate strategies

Table 1 - Competitive Advantage

The corporate strategies is to differentiate the company in the broad market by using the business strengths of it and also in order to maintain the competitive advantage the cost will remain as lowest as possible. Generally when a company focuses on board differentiation the cost is likely to be high but nevertheless. Mobitel may remain the cost at a lower level as it already posses the resources required to differentiate its new high speed internet service.

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Product Development Strategies 2.4.2 Growth strategy

In order to support the corporate strategies Mobitel basically attempt to exploit the opportunities from the existing market in which it operates as its relatively less riskier than new market development and diversification therefore the core strategy is new product/service development which has been introduced under Ansoffs matrix.

Table 2 Ansoffs matrix

Here at this stage the core intension is to speed up achieving marketing and corporate objectives by supporting market penetration strategy. New service developments will facilitate the company including marketing team to reach stated objectives effectively.

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2.4.3 Segmentation, Targeting and Positioning

Since the main marketing strategy is new product/service development awareness of the new service availability should be made in all the segments. The massage Mobitel will need to communicate would be the best quality internet service at the highest data transfer rate and more interestingly at the lowest rate which will turn gain the competitive advantage. Therefore the secondary strategy would be segmentation, targeting and positioning.

Table 3 Segmentation, Targeting & positioning

New M4 or high speed internet service will create a new customer base in addition to the existing customer base following elements.

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Segmentation

Table 4 Segmentation Criteria

The moving number of young people to cities for better carries and high education in becoming a considerable factor as a result they look for convenience through speed efficiency, ease and cost. This has been the fastest growing segment lately. The same segment now is switching from desktop PC to laptop computers which in turn create need for mobile internet accessibility. Business personalities who are always hectic now have the tendency holding online conference instead meeting at a physical location and students who finish their school education e\and mainly the students of universities now move to online education programs which are offered by foreign countries.

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Targeting
Having segmented the entire market based on above elements should then take place to market the service successfully. Thus the targeting groups will be as follows,

Table 5 Identifying Target Market

Since the corporate strategy is catering to the broad marketing with differentiation, primary target groups will be all customers who are currently using M3 broadband service. Even though there are slight differences between target groups based upon attractiveness and strength, each and every group may look profitable in future therefore focusing n a broad market could be possible by increasing necessary strength. 19 | P a g e A330MED

Product Development Strategies Positioning Mobitel will position its M4 internet service as the primer 28.0Mbps internet service provider in Sri Lanka as well as in south Asia for the very first time which provides the highest speed on internet accessibility at the lowest price. Thus M4 will be positioned in subscribers mind as high quality product at a lower price (Mobitel press release 2012).

Table 6 Positioning of potential M4 market

The benefits and unique features of new internet service will be key elements for positioning, particularly the benefits such as quality, speed, transparency in billing reliability. Ultimately a statement will be created which will distinguish M$ position from Mobitels pervious M3 service and also from competitors which will as below.

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Product Development Strategies 2.4.4 Branding

In order to make new and existing subscribers feel the newness of the new service Mobitel will exercise a rebranding campaign which firstly changes the logo of previous M3 with the intension of not creating confusion in customers mind.

New M4 Logo

Figure 6 New M4 logo

As a supportive campaign the marketing mix will be differentiated along with logo, Such as the packaging of SIM cards, Internet dongles, merchandizing materials and interior of Mobitel outlets.

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Product Development Strategies In order to make M4 a powerful brand in consumers mind, six basic factors created by De Pelsmecker et al, 2004 will be thereby perceived perception will be more enhanced.

Figure 7 De Pelsmacker et al, 2004

According to De Pelsmecker et al above model, the six factors will facilitate Mobitel to position its new M4 broadband service in consumers mind differently from competitors as well its own service. The strategies suggested above will ultimately assist Mobitel to bridge the gap of 10% roughly which exists between revised forecast and objective. 22 | P a g e A330MED

Product Development Strategies

Figure 8 GAP Analysis

2.5 Marketing Mix


In order for the company to practice the above strategies a well tuned marketing mix will be utilized which is comprised of product, price, distribution, promotions, people and customer service.

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2.5.1 Product/service

Broadband as a bundle of benefit

Figure 9 Product Objective- launching the potential service and become #1 in the broadband market

The principal product is the high bandwidth internet service. Data transfer rate per second will be 28.1Mb which is absolutely the highest quality. The main equipment required to connect to internet is the USB dongle which is manufactured by and supplied by HUAWIE. In order to make the customer feel that it is not the same product offered by other competitors, it will be offered as an augmented

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Product Development Strategies product by adding a 2 years warranty period and in variety of colours as the customer pleases.

Figure 10 Mobitel 4G Dongle

2.5.2 Price There will be no direct cost incurred in internet service the only initial cost would be the price of dongle and the price of pre-paid of post-paid package. USB dongle will be priced at Rs. 5590 which is considerable lower that the competitors. Competitors prices are stable at Rs. 6800 with one year warranty. Next cost would be the purchase of package. Either pre-paid or post-paid. Pre-paid package price Rs 200/= Post-paid package price Rs 500/=, 800/=, 1100/=, 1400/=

Rates of packages Pre-paid 2 cent per kilobyte downloaded till 1GB after exceeding 1GB, price will be 1 cent.

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Post-paid

2.5.3 Distribution/place

Frequency availability made island wide including new emerging markets north and north east with new towers and by creating joint ventures with SLT. USB dongles will be distributed intensively through all Mobitel arcades and main and sub dealers. Pre-paid and post-paid packages will be intensively made available through the existing supply chain which is comprised of core and sub dealers along with retailers.

2.5.4 Promotions

Primary strategy would be to utilize pull strategies heavily to create awareness, under ATL mainly TV will be occupied along with Radio. Outdoor advertising, internet and mobile will be used to support TV and radio advertising.

Secondary push strategy would be utilized to stimulate new and existing subscribers to buy and keep subscribers informed about upgrades, under BLT mainly co-operate literature and branding will be occupied along with heavy sales promotions.

2.5.5 Sales Promotions

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2.5.6 Process

24/7

customer

service

provided

through

automated

customer

relationship

management system. Technical support will be made automatically by transferring calls to technical officers.

2.5.7 People

Customer care unit agents will be trained to be knowledgeable in new service issues to provide customer with assistance. Regional outlet employees will be made knowledgeable to handle and solve the customer problems.

2.5.8 Physical evidence

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Product Development Strategies All Mobitel outlets will carry new M4 logo outside below the main hoarding Mobitel. Mobitel will be utilized as the umbrella brand for M4thus it allows people to identify the core brand. Vehicles will be used for M4 plan will carry the new logo. Staff members involved in M4 service will carry the new M4 logo on their attire.

2.6 Financials
This is financial justification of the marketing plan this will offer the financial over view of Mobitel relating to new marketing activities.

2.6.1 Expense forecast 2011/2012/2013

Heading Infrastructure developme nt for internet Maintenance & upgrading coverage Sales and Distributi on Staff wages, incent ives, salaries, travelling, fuel Media Above the line Media Below the line & Merch andizing and sales pro motion Total expenditure

2011 900 Million 150 Million 50 Million

2012 -- 215 Million 35Million

2013 -- 125 Million 25Million

400 million 250 Million

300 Million 150 Million

200 Million 50 Million

1.750 Billion

700 Million

400 Million

2.6.2 Sales forecast 2011/2012/2013

Heading M3 HSPA Service

2011 2 billon

2012 2.5 billon

2013 3.5 billon

According to the variance analysis first year operations will be able to meet the break even with a 0.5 billon favorable variance which is close to the break even due to the initial investment in 28 | P a g e A330MED

Product Development Strategies infrastructure, but from the 2nd year company will be able to exceed the break even by 1.8 billion and in the 3rd year its been forecast to be 3.18 billon.

2.7 Implementation
The following milestones plan will indicate the key marketing activities which need to be completed on time.

2.7.1 Tactical plan for the year 2012-2013

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2.7.2 Promotional plan for the year of 2012

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Product Development Strategies The tactical plan and promotional plans will be implemented by using the existing 3 marketing functions namely pre-paid, post-paid and M4 along with newly recruited personal who are specialized in IT and engineering. There will be no changes in the positions of brand or marketing managers thus control and monitoring of distribution and marketing activities will be taken care by regional and territory managers with the support of top level management.

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3.0 Marketing planning process


Marketing is based on the concept that an organization should identify the consumers needs and wants and then provide products or services accordingly to a satisfactory level. Failure to understand could result in a disaster for the organization. Marketing is a relevant discipline for all organizations, regardless of the business. (Kotler 2007) The importance of segmentation, targeting and positioning strategies would be evaluated for the successful implementation of the revised marketing plan of 28.1MB HSPA whilst being aware of the barriers that may be deter the marketing planning and implementation process. Ultimately the required tools to mitigate the barriers would be evaluated for success.

3.1 The role of marketing planning process


Marketing planning is process which is comprised of several stages which may vary from company to company depending upon the objectives and capabilities. Mobitel usually follows the basic steps on a marketing depicted below.

Figure 11 McDonald, 2007 p49

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Product Development Strategies The above structure is key advantages for the successful implementation of the marketing plan which was formed on a conceptual basis. The defined marketing planning process enables Mobitel to better manage day to day business activities through the criteria depicted below. Defines the market Marketing planning process firstly obtains information regarding to industry and market which is comprised of competitors, customers, trends and growing markets as well as changes in both external and internal environment. Information obtained would then enable Mobitel to indentify key strengths, which can be exerted to exploit the opportunities created by gaps. This definition helps Mobitel to be clear of the following criteria. Where the Mobitel is now? Where the Mobitel wants to be in the future? How does the Mobitel get there? And how does the Mobitel ensures its arrival?

The clear understanding of above elements would ultimately tempt Mobitel to come up with new SMART objectives and strategies so as to exploit the opportunities emerged. In order for the company to successfully make it, marketing planning process is used since plays the following significant roles in addition to the above role.

Sets up the direction and the focus of the organization.

The marketing planning incorporates both mission and vision of the company and present and future directions of Mobitel. Having set them only the stated objectives and strategies will be focused with the intension of coming up with a well tuned tactical plan.

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Product Development Strategies Tool to communicate the purposes and the future needs of the organization

Mobitel is responsible to convey its new changes namely the launch of M4 broadband service to relevant stakeholders whilst the organization clearly shows its ethical and cultural consideration. This produces the background to objectives of the company in a socially acceptable manner.

Acts as operational framework

Frame sets out plans for each aspect of the strategies to be used when achieving the stated objectives whilst outlining the strategies. Also identifies required resources such as time, budgets, physical resources, human resource etc for the successful implementation of plan.

Helps to allocate budget and resources

Cost of each stage of the plan will be monitored for the effective allocation of budgets which helps to reach objectives with no exceeding budgets and resources will be managed in order to omit delays and inefficiencies which may emerge though out the plan implementation.

A mechanism to measure performance

Monitoring and controlling tools of marketing plan helps to measure the performance of M4 plan throughout the entire implementation. This is useful to evaluate overall performance and identify areas where what went wrong and what really caused the unlimited effect.

According to McDonalds 2007 the overall purpose of marketing and its principal focus is the identification and the creation of a competitive advantage. As its defined by McDonald, Mobitel had the same need of marketing planning for a variety reason such as follows,

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Product Development Strategies The speed of technological alterations As a technology oriented company Mobitel always watchful of alterations made todays technology since technology has been the key fact their competitive advantage. Marketing planning process facilitated Mobitel to identify alteration has been occurring over the last few years in Sri Lanka telecommunication industry.

To raise the competiveness and also for the marketing people to identify the sources of competitive advantages.

Having identified the changes in technology then leads the company to develop a competitive advantage which will grow the business in return. Researches carried out to identity the changes happening in the market helped to come up with a break through idea of new service establishment.

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3.2 Importance of undertaking a marketing audit for the successful launch of M4 broad band internet
Marketing audit is a comprehensive, systematic, independent and periodic examination of a companys, marketing environment, objective, strategies and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the companys performance. (Kotler & Armstrong 2005)

The main 3 purpose carrying out an audit is to, Identify the organization current market position. Understand the environment opportunities and trends Clarify the organization ability to cope with environmental demands (Wilson & Gillgon 2005)

The audit facilitated Mobitel to identify where the company is at present and this is the basis upon which it can decide where it desire to head in the future. The audit which was carried out for the implementation of M4 is as below,

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Product Development Strategies The above systematic process enabled Mobitel to obtain a huge amount of information relevant to the specific business need. In order to successfully launch M4 internet service a thorough understanding of the external and internal environments were required and that was fulfilled successfully. Since the market is dynamic tools such as PESTEL, porters five forces and SWOT were used to identify the key issues and opportunities that could be exploited. Very firstly Mobitel need to analyze the most influential factors in the external environment over which the company has no control. The audit of the macro environment was done under PESTEL frame work, The study of the macro environment facilitated the company to identify the most influencing factors which may affect the M4 launch. Especially the political exercises relevant to telecommunication were very essential as a failure to adopt the internal process in accordance with the external factors might result in a severe financial lose as well as reputation lose. Information obtained from both Macro and Micro environment enabled the Mobitel to identify the market trends, market gaps and opportunities as well as the growth and the profitability of the market.

Micro audit obtained information relevant to the industry, customers, competitors and suppliers which in turn helped Mobitel to come up with smart objective and great strategies to the successful launch of M4.

Information may be utilized throughout the entire planning and implementation of the M4 plan. Basically the analysis was done focusing on men, money, materials, machinery and minutes. The adequacy of resource formed the foundation for the commencement of the plan also to better manage internal teams engaged in the plan.

Also audit was useful to form a clear picture of the effeteness of the product and service portfolio of the company which defined how well each product in the market.

Strategic audit was able to identify the necessary strategy for the successful implementation of the M4 plan whilst fine tuning the marketing mix.

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Product Development Strategies Thus its evident that the audit is must for the successful implementation of the marketing plan because of the following key advantages,

Frequent audit gives strength to planning process and indirectly it enables Mobitel to stay ahead of the competition. As the marketing environment is rapidly changing Mobitel needs to have structure in place in advance so an audit gives the way for a company to build up the necessary structure.

It creates the opportunity to identify the problems at an early opportunity before affecting the entire business process of the company.

Even though there are several advantages in carrying out an audit there were certain unfavorable issues faced by Mobitel research and development groups. Those factors have potential of deterring the audit process and destructing the entire marketing planning process. Those factors are depicted below,

Time was one of the key issues face in term of gathering information. (When obtaining information in northern and eastern markets R&D group had to stay therefore nearly 2 weeks)

The increasing speed and turbulence of the business environment results in timeliness. (By the time the audit gets complicated the information gathered might be out dated and re obtaining information will take time and cost)

A significant cost had to be incurred. (The expenses of R&D groups, transportation, accommodation cost etc had to incur during the period)

Inter-departmental coordination difficulties. Finance department was reluctant to allocate budgets for audit as it was quite high therefore a problem was raised between marketing and finance

The most critical issue was the completion of audit within the given time of period.

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3.3 Utilization of segmentation, targeting and positioning and their importance


Before the most appropriate strategy is developed its necessary to determine both cooperate objectives and the corporate objectives of the company. Thus having identified the below criteria only the marketing strategy would be developed.

Mission and the vision of the company and the corporate strategies. Opportunities and capabilities of Mobitel. Marco and Micro environment should be scanned for information regarding to customer and competitors.

According to the strategies report the corporate strategy is to differentiate the company in a broad marker context by practicing new product development as its a less risky strategy relatively to market development and diversification. In order to best support the strategic approach segmentation, targeting and positioning strategy as depicted below.

3.3.1 Segmentation Segmentation is the process of dividing a total market on some criteria into several groups consisting of homogenous customer so as to enable the marker to approach each segment with specially designed marketing mix.

As the definition implies this process helps Mobitel to lunch new M4 service with the advantages which ease stepping into targeting approach.

Segmentation could be done on a demographical basis which comprises factors such as age, income, profession, education.

Mobitel basically segments the entire market based on age, income, profession and education as these segments are showing a signification growth and a high potential for high speed internet which ultimately results in high profitability.

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Segmentation is also done on the basis of Geographics which is primarily done within a country, provincially and state wise or with a foreign market.

Since the core strategy is catering to existing market with a new product, the entire island will be considered as a segment.

Segmentation for M4 will also be done on the basis or usage of pattern Consumers are classified as heavy users and light users as well as brand loyal users and switchers who enable the company to fine tune the marketing mix in terms of catering to each area.

Psychographic and life style are also another major segment basis which enables the marketing team to better understand the interests, activities, attitudes and behaviors of customer through psychographics.

Segmentation gives a clear understanding of the difference that exist between customers groups to which Mobitel caters and hoping to cater which help the company to first target particular segments and fine tune marketing mix so as to satisfy each segment perfectly

It also exposes the gaps in the market. It shows groups that are not being satisfied with the available products and even the groups which are looking for something new.

Segmentation facilitates to retain the customer by catering beyond the expectation with specialism since its very costly to recruit new customer that retaining existing customer this really helps company to market it service as it focuses on the existing market.

Ultimately segmentation assists the marketing team to estimate sales and profitability by analyzing each segment separately.

Thus the new M4 broadband service can be successfully implemented as its well justify by the segmentation process which makes the investment secure.

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Product Development Strategies 3.3.2 Targeting Having segmented the marketing the next step is to decide which of these segments the company wishes to focus on for its marketing purposes. The selection of segments and targeting would be done based upon dimensions identified by Kotler

Measurable Accessible Sizable Profitable

Based on above criteria there are basically 4 possible strategies to be utilized.

Concentrated marketing Differentiated marketing Undifferentiated marketing Niche marketing

Since Mobitel expects to cater to more than one segment differently Differentiated marketing approach will be used.

Laptop and PC users will be target based on their profession and income. Elements of the marketing mix such as prices and promotions will vary from other marketing mic targeted at following groups.

University students will be a primary target as distance learning programs and online programs being developed. The prices and promotional mix varies catering to these targets.

Private sector and government sector employees will be targeted as its vary much easier as most of the government servants use Mobitel per-paid packages. Thus all segments stated in strategic report will be targeted as all require the benefits of convenience through speed and quality.

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Product Development Strategies 3.3.3 Positioning According to Kotler et al 1999

A product positioning is the way the product is defined by consumers on important attributes the place the product occupies in consumers mind relative to competing products. The main purpose of positioning is achieving a competitive advantage over the companys rivals which can be perceived by the customer and successful positioning can be done by balancing the needs of the customers with the available resources. In terms of positioning there are several factors which can grow the brand in consumers mindset.

Credence Attributes such as speed convenience and reliability used to create a position is the market thus the product is placed in target groups minds as a distinctive product.

Consistency The attributes offered such as quality, speed, convenience and reliability will be consistence through the marketing mix used for each target group.

Competitiveness The product must offer benefits that are not offered by any other competitors in the market thus the product is placed in target groups minds as a distinctive product.

Clarity Clear positioning is an issue which means the product has to act as it says Mobitel will position its new internet service in mindset of customer as the premier 28.1Mbps internet service provider in Sri Lanka as well as in south Asia which provides the highest speed and the highest reach at the lowest price.

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3.4 Potential issues that may be encountered in implementation of the marketing plan and proposals to address them
The most difficult part is implementation of the plan. Its easy to do planning of strategies relatively to implementation. Therefore there are 3 key areas that are essential for Mobitel for implementation of M4 marketing plan.

Communicating the marketing plan across the organization Specifying the required resources, finance personal and time Changes to the organizational structure and culture.

There are several issues that may be encountered during the implementation of the M4 plan which in turn may course destruction.

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4.0 Conclusion
As the above write-up implies in order for Mobitel to successfully launch its new services to the existing market its vitally necessary to have gone through a well established marketing planning process which crates clear picture of market situation and the exact cause of actions which may be used to successfully execute the marketing plan. But in order to have established a better plan a successful audit is necessary because thats what exhibits the available gaps which may be made us. With a well established strategy like STP Mobitel may gain an extra advantage to be more successful in new service launch because strategies will indicate more opportunities while preceding through the plan to have it done better way also it will create a futher sophisticated competitive advantage to the company. Being aware of barriers will be vety substantial as they could deter the process of marketing plan. Therefore in order for Mobitel to successfully implement the marketing plan solutions will be needed to overcome the barriers which will lead the company to the highest competitive level.

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5.0 List of References


Lanka Business Report (2011) Sri Lanka telephones overtake population: Central Bank [online] available from <http://www.lbr.lk/fullstory.php?nid=201105251731037359> [25 April 2012]. Telecommunications Regulatory Commission of Sri Lanka (2011) Statistical Overview [online] available from <http://www.trc.gov.lk/information/statistics.html> [25 April 2012]. Annual Report (2009) Sri Lanka Telecom PLC. (page 55) Inforsrilanka.net (2011) Mobitel 4G Lite [online] available from <http://www.trc.gov.lk/information/statistics.html> [25 April 2012] Pelsmacker, De P. (2004) Marketing communications. London: Pearson Education. Kotler, P. & Armstrong, G. (2008) Principles of Marketing. New Jersey: Prentice-Hall Inc. Phil, M. & Graham, H. (2009) The Marketing Planning Process. London: Elsevier. Kotler, P. & Keller, K. (2011) Marketing Management. New Jersey: Prentice-Hall Inc. Ulrich, T. & Eppinger, D. (2012) Product Design and Development. New Delhi: Tata McGraw-Hill Ltd. Information and Communication Technology Agency (ICTA) (2010) Sri Lanka Mobile Market [online] available from <http://www.icta.lk/en/e-sri-lanka.html> [11 May 2012]

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6.0 Appendix
6.1 Marketing environment audit
Political

Since the war is over development plan in Northern and Eastern is taking place. Particularly the development of infrastructure including schools, education institute, healthcare. As the infrastructure being developed the communication will become a major need which in turn may create a significant potential for high speed internet in next decade.

Tax levied on imported electronic goods have been reduced by the current government by removing the surcharge consequently the cost of the imports have started to decline thus the prices of mobiles, mobile accessories internet equipment such as modems, routers and broadband USB dongles.

Equipment used for the purpose of communication required to obtain the license form TRC Telecommunication Regulatory commission. This has limited the opportunities available to unauthorized importers to import mobile and internet accessories.

WTO has been influencing the local government to further reduce the tax especially on imports thus it has been forecast that there will be more benefits through advantages of prices of imports.

Economical

Inflation had been reduced to a single digit 3.4% from 22.5% in 2008. Decline of inflation now has drowned the attraction of investors especially in hotel industry which may create a huge market in tourism. Thus quality and effective communication will be one of the principle requirements in the very near future.

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Product Development Strategies Bank interest rates for fixed deposits have been reduced to an average of 10% form 24% as a result now people are keen on investing money in different sources rather than in FDs. Share market is reported to be one of the best share markets globally. As a result now ordinary people who have money to invest tent to start investing in stock exchange and trade online. Therefore the demand for high speed internet has become a significant demand especially in suburban areas. Unemployment rate has been declining over 3 years from 8% to 5.9%. Since the employment is increasing new career opportunities are made so the

communication has become q major need for efficiency. Literacy rate has grown up from 90% 91.6% by the end of 2009 which is evidently shows that local education system is being developed particularly private universities, private study centers, local universities are also becoming technological oriented plus government schools and international school.

Social and cultural

Propensity towards convenience through efficiency particularly in private business sector in terms of online conference and video calls which will increase the demand for high speed internet since employment increase

High tendency of people towards innovation which in turn creates job opportunities for people who live outskirt of Colombo. Jobs bases on internet. Quality is becoming a major concern for people rather than the price thus the society is very much concern about the quality. Society has now started to increase the use of internet form 2003 to 2008 from 1.5% to 5.77%

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Technological Telecommunication communication Several technological programs are taking place to make the society technology oriented such as vidatha (transfer of technology) program, alternative energy programs and other development program like gamma irradiator ICTA( information and communication technology agency) preparing itself to contact practical training programs for Sri Lanka media personal on internet which will definitely require the speed internet. The usage of technology in education increase in Northern and Eastern provinces especially for distance learning programs. kotmale community internet radio project attempts to enhances the benefits of information and technology in remote areas thus there will be a high potential for high speed internet in next 5 years. industry is thriving tremendously particularly the mobile

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Legal Ministry of technology and research has been restructured to enhance the technological strength in the region through new policy formulation and implementation. ICTA establishes an E-laws project to strengthen legal environment for the development of information and communication in Sri Lanka through laws by the parliament. Standards of all equipment used for communication required to be approved by TRC.

Micro environment Market potential the internet market in Sri Lanka has already been occupied by several telecommunication companies with both dial up and ADSL, but nevertheless existing internet service which used to be an expected service now becoming basic service since the speed of data transfer is insufficient therefore there is high potential for higher speed internet service but the risky factor would be the market is consisted of network providers who may have the capabilities of exploiting the opportunity. Current market internet usage and population statistic:

Note: per capita GDP in Us dollars

As a percentage 8.30% of the population use internet all Dialup ADSL and broad band

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Product Development Strategies Market trends- The fastest growing segment is the in today market in the young crowd who are both carrier conscious and studying oriented. With the increase of this segment the number of lap-top computers users in increasing while creating a need of mobile internet accessibility. Students in other hand tent to start their higher education programs at high schools which need a speedier internet service for examinations and other studying activities. Thus convenience, speed and cost have become the most common trends and need in the internet market.

Market growth

According to the above spastics the number of subscriptions has gone up to nearly 250,000 by the mid of 2009.The lunch of new services made by other competitions such as Sri Lanka Telecom, Dialog GSM, Airtel, Hutch and ETISALATE has been the most important single reason for this growth next to the demand of customers but the gap between the demand increase and growth of high speed internet service over the last 5 years has shown potential for anyone who is capable of launching new high speed technology to fill the gap. 53 | P a g e A330MED

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Customer/Target Market - Mobitel as the national Mobitel network provider caters all most all of the customers based a verity of segmental elements thus marketing new service will be create less hassles since the customer base is already formed which comprises ,Teenage, University students, Government servant, Private sector employees, High profile businessmen. The customer base of Mobitel has been designed by verity of segmental elements like Age-teenage, university student Occupation-government servant, private sector, top business sector Psychographic-life style, business, conveniences Usage-frequent user

Competition - Mainly there are 6 telecommunication companies who the capability of providing internet service. Since speed is the main element in internet services all competitors try to posses the highest speed of data transfer to gain more of the market share.

There is a heavy competition particularly between mobile network providers who have the capability of providing up to 7MB data transfer rate per second and that have been the main reason to looking for a speedier service supply.

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Competition based on strength and weaknesses

According to competitor strength and weakness analysis its evident that almost 4 companies are capable of exploiting the opportunity available for 28.1 MB service launch. Since Mobitel Stands as 2nd strongest entity its feasible to make use of the opportunity prior to any one of other.

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Suppliers - There used to be only one supplier of internet related equipment namely GOTEL but since the usage and the demand of internet is thriving new suppliers have started entering the market. The strongest current suppliers of internet and mobile equipment are HUWAI and COMTRONICS Lanka PVT Ltd. Distribution and dealers - Distribution of network is made through own tower and SLT towers. Engineering task and other technical issues has been outsourced to SIERRA. Distribution of pre paid and post paid packages made through a channel which comprises communication shop, phone shops, main and sub dealers. And 7MB HSPA USB intranet dongle is distributed through Mobile arcades, phone shops and computer shops.

6.2 Internal Audit


Marketing Strategy audit

Marketing Objective - Marketing objective for the previous financial year was to increase sales in POST Paid packages by penetrating the market. The current objective is to maximize sales of both pre paid and post paid regularly and also as an special internet package. Strategy - The core strategy is NPD (new product/service development) as the corporate objective is catering to existing market with new and the latest products and services thus the growth has been obtained mainly by catering to the existing market with new product and services. As the supporting strategy STP is being exerted heavily along with cost advantage. Company caters to each segment with a different tuned marketing mix at the most effective cost. Marketing organization audit - Even though there are no marketing directors there is a chief marketing manager who is responsible to all marketing decisions. Marketing department is comprised of 3 main functions namely Product team-POST PAID, Product team-PRE PAID Product team-M# (Broadband).All product team are accountable to retail sales manager and 56 | P a g e A330MED

Product Development Strategies cooperate sales manager. The decision taken in marketing department should be transparent to CEO and depending on the risk involved the decision required to be communicated to the chair person. Marketing system - Information relevant to marketing, obtained through the data base which is functioned by an ERP system which is again functioned by CRM (Customer relationship management) system KM (Knowledge management) system, SCM (Supply Chain Management) System. KMS obtains information mainly from external sources automatically and interprets to ease decision making process. CRM obtain information relevant to subscriber and facilitate to make decision relevant to future needs. Marketing control System - this allow the management team to evaluate the success tare of the product and services range through the analysis of budget. New product Development - Since mobile is into service marketing, physical product are not of the product and services range through the analysis of budgets. New product development Since Mobile is into service marketing, physical product are not development by the company itself.SIM, pre paid voucher and accessories are bought from suppliers on contractual basis. Thus there is no NPD process in place except for network quality development Marketing productive Audit-Productive of each marketing function is measured according to the objective achievement and profile made. Staff productive measured through the performance of teams, individuals and target achievements. Productivity of budget measured through budget variance analysis.

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Marketing Function Audit


Product - There are 3 products namely SMART pre paid, post paid and M3 (broadband) broad band has become the 2nd highest next SLT. Price - The Company utilizes the product differenced pricing as there are 3 various products so there are variation in the prices of each product and services. Place - Distribution of network is already done through both SLT and MOBITEL own towers and the SIM packages, pre paid vouchers and internet USB dongles are distributed through a channel system. Promotion - Both ATL AND BTL tool are being used for promotions. Particularly TV and Radio advertising, internet, sales promotions, merchandizing, and sponsorship (Sri Lanka cricket team) People - There are 3 main teams for each product and service. People have been trained and made familiar with the products and other relevant elements. Uniform is a must especially for field teams and office people. Physical evidence - M3 logs is used along with MOBITEL official trade mark and interior and exterior of Mobile regional showroom are designed as pre the standards made by head office .Sub dealers and main dealers are decorated with boards and stickers. Process - The ERP system is a place to manage information, customers and suppliers to increase the efficiency to the best level.

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6.3 Contribution of Group Members


The group members are, M.K.K.R. Mawella A.V. Thushara We received our Courses Works on 31/03/2012 and we met as a group to discuss about the course work on 2nd of April 2012. We divide the tasks and gave the tasks to each group member to do within this given time period. M.K.K.R Mawella Introduction Problem statement describe Product planning Typing & Designing of the Assignment

A.V Thushara Concept generation Product specification Product life cycle SWOT/PEST Marketing & Financial implications Conclusion

Task Name
Problem Statement Describe Product Planning Product Specification Concept Generation Product Life Cycle SOWT/PEST Marketing & Financial implications Conclusion

Duration
3 5 3 5 3 6 2 1

start
2/04/2012 7/04/2012 11/04/2012 15/04/2012 18/04/2012 24/04/2012 26/04/2012 27/04/2012

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