Dots Mobile case study

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DOTS Mobile Marketing

Strategy

Symbiosis Institute of Management Studies

Project Report

Submitted by

Krunal Sanghavi

C0552nd Year PT MBA2010-13Specialization: Marketing

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EXECUTIVE SUMMARY

Cellular telephones have revolutionized the communications arena, redefining how we perceivevoice communications. Traditionally, cellular phones remained out of the hands of mostconsumers due to their high cost. As a result, cell phone carriers have invested time andresources into finding ways to give the systems higher capacity and thus lower cost. Cell systemsare benefiting from this research and starting to develop into large-scale consumer products.

Today, cellular phones are truly consumer electronics devices with over 59 million subscribers.The Nokia Bowl and Qualcomm Stadium are further evidence of the idea that cell phones are

consumer electronics devices. Cell phones have ceased to be an exclusive status symbol of high-powered lawyers and are now in the hands of millions of consumers.

DOTS Cellular Phones, Inc. is taking advantage of an opportunity to become a highlydistinguished and recognized leader in the cellular communications industry. It is the goal of thiscompany to become established as the leading distributor of wireless communications services inthe metro area.

In order to achieve this goal, DOTS Cellular Phones' critical success factors will be to identifyemerging trends and integrate them into the company operations, respond quickly to technologychanges/be there early, provide high-quality services, invest time and money in marketing and

advertising, expand into specialty markets, and stay ahead of the "technology curve."

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Table of ContentsINTRODUCTION ......................................................................................................................................................... 4

PROJECT OBJECTIVE ................................................................................................................................................ 5

DOTS MOBILE COMPANY........................................................................................................................................ 6

INDIA STRATEGY ...................................................................................................................................................... 7

RESEARCH METHODOLGY, DATA COLLECTION AND DATA ANALYSIS .................................................... 9

SEGMENTS OF MOBILE .......................................................................................................................................... 11

Types of mobile phones ...................................................................................................................................... 11

THE INDIAN MARKET OPPORTUNITY ................................................................................................................ 12

Mobile Retail in Indian Market ............................................................................................................................... 13

Future Volumes of Mobile Retail............................................................................................................................ 14

PEST ANALYSIS OF MOBILE ................................................................................................................................. 23

PORTERS 5 FORCES MODEL ................................................................................................................................ 26

COMPETITIVE ANALYSIS WITH MARKET ......................................................................................................... 29

CONSUMER NEED ANALYSIS ............................................................................................................................... 37

CONSUMER SEGMENTS..................................................................................................................................... 38

BUYING BEHAVIOUR OF MOBILE CUSTOMERS .......................................................................................... 41

OPPORTUNITY FOR MOBILE BUYERS ........................................................................................................... 42

INDIAN MARKET ENTRY STRATEGY ................................................................................................................. 44

TARGET SEGMENTS OF CUSTOMERS FOR MOBILE ................................................................................... 45

DEMOGRAPHICS OF MOBILE CUSTOMERS .................................................................................................. 48

COST DECISION IN MOBILE PHONES ............................................................................................................. 49

POSITIONING OF MOBILE COMPANY ................................................................................................................. 50

SWOT ANALYSIS .................................................................................................................................................... 51

CAPITALIZING ON STRENGTHS ........................................................................................................................... 55

Retail ....................................................................................................................................................................... 55

Insurance ................................................................................................................................................................. 55

High Technology..................................................................................................................................................... 55

MVNO CONCEPT ................................................................................................................................................. 56

GOOD BRAND RECALL ...................................................................................................................................... 60

RECOMMENDATION ............................................................................................................................................... 62

CONCLUSIONS ......................................................................................................................................................... 63

BIBLIOGRAPHY ....................................................................................................................................................... 64

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CHAPTER 1

INTRODUCTION

Mobile phones today have moved beyond their fundamental role of communications and havegraduated to become an extension of the persona of the user. We are witnessing an era whenusers buy mobile phones not just to be in touch, but to express themselves, their attitude, feelings& interests.

Customers continuously want more from their phone. They use their cellular phones to playgames, read news headlines, surf the Internet, keep a tab on astrology, and listen to music, make

others listen to their music, or check their bank balance.

Now to analyse why the growth graph seems to be at an all time high means to understand thebuyers psyche. As the economic stability of the country is growing so is that of an individual.Income patterns are rising and employees are moving up the corporate ladder. They want to beseen with better handsets as there is a quaint feeling that the mobile should match the designationor just make a status statement with a smart and expensive phone. Hence with such attitudesruling the market everyone wants to stand out with the handset they own.

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CHAPTER 2

PROJECT OBJECTIVEThere exists a vast world beyond voice that needs to be explored and tapped and the entirecellular industry is heading towards it to provide innovative options to their customers. Spoilt bychoice, the mobile phone subscribers are beginning to choose their operators on the basis of thevalue added services they offer. The increased importance of VAS, MVNO has also madecontent developers burn the midnight oil to come up with better and newer concepts andservices. The mobile subscriber base is growing at a scorching pace in India; India is now the5thcountry in the world to have crossed the 100 million mark in subscriber base and has in thelast two months become the fastest growing mobile market in the world. As average revenue per

user decrease from voice drops, and voice becomes commoditized.

India has come in a close second in the sale of mobile phones in the year 2006. China has led therace of mobile sales being the highest in the world. In India however the GSM phones rule overthe CDMA handsets. Leading the categories are Nokia, Samsung, Sony Erickson while Reliancetakes a large size share in the corporate segment.

Subscribers in India are basking in the glory of the ever increasing number of subscriberpatronage. Around 14.95 crore new subscribers were listed up from 8.5 subscribers in 2005. Agargantuan number of around 5 million customers enroll each month giving the networkproviders a huge profit margin. According to the increasing number the subscribers list is said to

hit 48 crores by 2011 that is an approximate of 50 crore. Wow, this is some industry that isclimbing the path no matter what comes in its way.

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CHAPTER 3

DOTS MOBILE COMPANY

DOTS Mobile sells mobile handsets based primarily on Global System for Mobile

Communications, or GSM. DOTS Mobile has partnered with most advanced mobile phoneR&D and output capabilities. It predominates the technology of GSM, GPRS, CDMA

mobiles and value-added services, of which technology 3Gs GSM and CDMA are in the

same phase with the advanced worldwide technology.

DOTS Mobile corporate spirit is For INDIA, forworld.

In the era that information technology fulfilled with humanity, DOTS Mobile firmly

believes: only when being national can be international. Based on the deeply insight of

Indian civilization and lifestyle, DOTS Mobile perfectly mixes the cutting-edge technology

with Indian peoples taste and preference through the forward looking strategic vision.

Our mission is to use the worldwide technology to serve Indian consumers. Our technology

is in the same phase with the advanced worldwide technology. We will utilize our excellence

and diligence to create a refulgent future!

When we start a new venture, we base it on hard research and analysis. Typically, we review

the industry and put ourselves in the customer's shoes to see what could make it better. We

ask fundamental questions: Is this an opportunity for restructuring a market and creating

competitive advantage? What are the competitors doing? Is the customer confused or badly

served? Is this an opportunityfor building the Dots brand? Can we add value? Will itinteract with our other businesses? Is there an appropriate trade-off between risk and reward?

Reference:http://www.dotsmobile.in/AboutDotsMobile.aspx

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CHAPTER 4

INDIA STRATEGY

When we start a new venture, we base it on hard research and analysis. Typically, we review the

industry and put ourselves in the customer's shoes to see what could make it better. We ask

fundamental questions: Is this an opportunity for restructuring a market and creating

competitive advantage? What are the competitors doing? Is the customer confused or badly

served? Is this an opportunityfor building the Dots brand? Can we add value? Will it

interact with our other businesses? Is there an appropriate trade-off between risk and reward?

Whilst achieving a low operating cost per customer through

Sharp focus on Indias top youth markets Fewer, stable propositions with low support and service costs Imaginative, eye-catching advertising & PR that gets youth talking A lean, enthusiastic team supported by simple processes

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Delivering imaginative solutions that offer

Value for money. Great handsets at great prices Personalized customer care Try before you buy Real conversations: no scripts End-to-end ownership of problems: same Champ call-back Champ empowerment: authorized to resolve issues on the spot A real returns policy Shop in Shop and Kiosks Non exclusive, extensive coverage, lower costs The one commonality all of the retailers share is they are places where teens shop,

because thats core market.

Reference:http://eurologix.eu/about_company.html

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CHAPTER 5

RESEARCH METHODOLGY, DATACOLLECTION AND DATA ANALYSIS

The research methodology was primarily based on collecting data about the MOBILE &

MVNOindustry of India from various sources and then compiling them with the trends in retail

sector in supply chain management. I went through different websites on Mobile retail and supply

chain in retail from library. My aim throughout this research was to find ways to create value in the

marketing of the Mobile Handsets & GSM operators in Indiaand how we can provide better quality

and service to the customers by improving the methods of logistics, cost & delivery.

DATA COLLECTION

In qualitative research, the researcher is the primary data collection instrument. Qualitative

research involves data collected from participant observations, interviews, questionnaires, phone

calls, focus groups etc. Interviewing, focus groups, and participant observation are common

modes of qualitative data gathering. Data collected from the competitor brand like Micromax.

Previous launch of Mobile phones also plays an important role as it is practically implemented.

DATA ANALYSIS

Qualitativedata analysiscontains reviewing, summarizing, generalizing and interpreting data in anappropriate and accurate way. It is to describe and explain the phenomena of social worlds being

studied. There are two different analytical procedures: Meaning and discovery-Focused approaches.

Meaning-focused approaches emphasize meaning comprehension. In other words, try to understand

the subjective meaning of experiences for the participants, instead of placing those meanings into

researchers own conceptions. Discovery-focused techniques aim to establish patterns and connections

among elements of data. However, no matter which procedure is used, it is essential to apply an

effective system for retrieving data because of the identity of qualitative data analysis, which is

exploring data progressively. Clustering was the method used data analyzes, In general the following

methods were used:

Group Discussion: A general discussion was done in a group regarding the features do the people want

in a mobile phone? Does cost play an important role in the success and failure of mobile phones in

INDIA? Service plays an important role in the building of brand.

Observation: the help of social networking sites likewww.toostep.comwere the discussion on mobile

phone is done and the industry experts advice on it. Some of the successful brands like Micromax, Intex

mobiles their marketing strategy was studied.

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Personal Interview: which included from youth to old age their requirement and how we can

cater into it? The questions included were in the following format:

1.) Have you used mobile phones?

2.) What excites you about mobile phones?

3.) What are the features you require in mobile?

4.) Is it 3G included in it?

5.) Have you heard about dual sim mobiles with TV in it?

6.) Is price the main factor while buying mobile?

7.) How many days you upgrade your mobile phone?

8.)Is Battery a issue?

9.)Is service a issue in mobile?

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CHAPTER 6

SEGMENTS OF MOBILE

Types of mobile phones

Smart Phone

Smart phones are high specification phones that operate like miniature computers. They canusually do tasks like connect to the internet and receive emails. Recent examples of smart phonesare the Apple phone, Blackberry and Google Android phones.

Camera Phones

Camera phones come with a built in camera. Some new camera phones are reaching the 12megapixel mark, though a standard model will frequently between 2 and 8 megapixels.

Music Phones

Music phones will ideally have a good mp3/aac audio player and enough memory to hold areasonable amount of songs. Always make sure that your phone has plenty of onboard/includedmemory, or is upgradable to have more memory via an SD/memory card slot. Ideally you will

want at least 1-2gb, though it is possible to get up to 16gb.

3G Phones

Phones designed to work on the 3G system. 3G opens up faster communication and browsingspeed. Phones frequently feature internet browsing and video call.

Reference:http://types.org.uk/phones/mobile-phones/types-of-mobile-phones/

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CHAPTER 7

THE INDIAN MARKET OPPORTUNITY

India is one of the fastest growing mobile markets in the world and with that brings immensemobile marketing opportunities for branded consumer companies. As Indian operators increasetheir sophistication and gain a better understanding of the demographics and usage statistics oftheir subscriber base, a scenario will emerge where the operator will sell this information tomarketers. This is no different from a television network or radio station collecting ratings data

and viewing habits for its programming, which enables it to sell commercial time for sponsors.

The continued success of SMS marketing in India depends on the willingness of the Indianmarketing and advertising establishment to adopt wireless as an accepted vehicle for campaigns.SMS Marketing is only the beginning and as operators upgrade their network to 2.5G/3G, MMSwill allow marketers to develop even more sophisticated campaigns

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Mobile Retail in Indian Market

The retail segment of thefastest growing Mobile market in the worldhas touchedUSD 16

Billion (Rs75, 000 Crores) and rising 20% YoY. What does Mobile retailing include? Mobileretailing is not just selling fancy handsets and accessories. The big chunk of it is selling pre-paidcurrency. Approximately 80% of the subscribersare in the category of pre-paid.(Source: BhartiAirtel Limited, Q2 Report). Surprisingly, the Indian consumer electronics market is estimated atmere $5.5 Billion (Rs25, 000 crores)

With such a huge potential for the mobile market, several players are entering the organizedmobile retailing sector.Mobile NXT was the first one to enterdirectly into the business withoutany retailing background;Mobile Magic was a state wide distributor and opted for its ownbranding. Universal Telecom was a distributor too and opted to go foronline mobile retailing.ConvergeM and MBazaarare owned by Indias famous retailerand are also planning for conceptmobile stores. Others in line to get a slice of Mobile retail market are Essar Telecom, ITCLimiteds eChoupal for rural mobile marketing and DCM Shriram through their Hariyali KissanBazaar once again targeting the rural Indian consumer.

The concept of branding and retailing has caught every faction of the Indian consumer market.After Bangalore basedMobile NXT, Pantaloon quietly ventured setting up ConvergeM mobileretail chain under the brand name M Bazaar, M Port and Gen M. It is now Essar groups turn toenter cell retailing.

Esaar Telecom has done due diligence in association with KSA techno park and is willing toinvest up to Rs3000 crores in 3 years. The company is planning to setup 1,000-2,000 sq ftstores, which will be one-stop shops for customers mobile needs. They will offer telecom

handsets, connections, recharge vouchers, mobile accessories, after sales services, facilities forbill payment, gaming, mobile entertainment options, repairs and refurbishment.

All these stores means an end to your local mobile retailer .After adding currency to mymobile, if I want the latest Halo-2 game do I need to look for the game retailer? Doesnt makesense. Companies such as Essar with deep pockets should have plans to scale up their operationto the size ofBest Buy orCircuit Citywhich is so essential for the Indian consumer.

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Future Volumes of Mobile Retail

Its not difficult to see whats keeping Sanjeev Mahajan, CEO, Hotspot, the mobile retail chainof Spice Corp, on his toes. In the face of stiff competition from rival retail chain brandsMobileStore, Subhiksha Mobile and M Bazar, to name a fewin the telecom products segment, hesturning aggressive to secure a leadership position for Hotspot.

So the over two-year-old chain is targeting 1,000 mobile phone and accessories outlets underthe Hotspot brand name by the end of the year. We are opening an outlet a day and we alreadyhave 325 Hotspots in important cities, says Mahajan.

Interestingly, though, Mahajan is not the only one thinking big. Subhiksha Trading ServicesManaging Director R Subramanian also intends to double his Subhiksha Mobile stores both inthe standalone format and the shop-in-shopsfrom the current 740 outlets.

In the last one year, Subhiksha Mobile has grown much larger than the others (read rivals) notonly in terms of the number of stores but also in terms of volumes as well, to become the largesttelecom products retailer, claims Subramanian.

Clearly, the mobile handset market is buzzing with new branded retail chains such as Relianceand Aditya Birla Group entering the fray and the existing chains expanding their footprint.

Take Pantaloon Retails JV with Axiom of Dubai, for instance. The company is re-branding itsstandalone retail chain Mport to Axiom stores, which is among the largest telecom productschain in West Asia.

The mass market products will continue to be sold under M Bazar, its shop-in-shops at the BigBazar outlets, while the lifestyle products will find their way into Axiom. By the end of the year,M Bazar will grow from 100 to 428 outlets, while the company will open 35 Axiom stores bythen.

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The lure of the telecom products market is easy to explain. Indias cell phone market adds eightmillion subscribers every month. The replacement market is close to 55 per cent already (inDelhi, the figure is 60 per cent). A BCG research says that by 2010, Indias replacement marketwill be 70 per cent.

Put together, the size of the handsets market is about Rs 70,000 crore (Rs 700 billion) a year.Commenting on why Pantaloon entered telecom retail, its spokesperson says: It is a bulkvolume business. The margins are made on total volumes sold.

Needless to say, the opportunity is enormous. The industry has been dominated by theunorganised playersnearly 500,000 mom and pop stores sell phones, recharge cards andaccessories.

Whats the USP of the branded chains that are rolling out nationally, compared to theneighbourhood shopkeeper stocking mobiles?

Their inventory is limited while we will stock phones priced between Rs 1,000 and Rs 50, 000,points out Mahajan of Hotspot. Besides, the branded chains promise high-quality service as theyenter full-scale servicing tie-ups with different phone brands.

Hotspot hopes to beat competition by offering hi-end cameras, iPods and laptops at its 450 sqfeet to 600 sq feet showrooms. This is in addition to mobile phones, memory cards, pouches andother accessories that it already stocks.

On the cards are other VAS (value-added service) products. While music videos were introducedtwo months ago, a full-length feature film on a chip will be the next big thing at Hotspot. Youcould watch this film on your mobile screen. And the USP is that we are offering legal content,

says Mahajan.

Subhiksha, meanwhile, is offering only the lowest and best value on all handsets at its stores.Subramanian says that the share of sale of VAS products and personal electronics in its portfoliois low but over the next three to six months we hope to make significant progress in thisdirection.

Organized retail, which started off with a market share of less than 1 per cent two years ago, nowenjoys 15 per cent share. This will swell to 40 per cent in another two to three years. Of course,once FDI in retail is cleared by the government, Sanjeev Mahajan job could only get tougherwith expert international retailers such as Crazy Jones and Eurosat setting their foot in India.

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Potential of Hand Set Retail

The completion of this acquisition represents a significant step for us in our growth strategy.Global Access has been a strong regional brand. This acquisition will bring in presence, expertiseand experience of their retail business in the region and unleash a force multiplier that generatesvalue for the business as well as for the customer across segments. This is but a step towards a

larger goal.

Spice Retail also has plans aiming to reach its audiences in many more ways than just mobilityand IT products. It will soon be adding products in categories like imaging, gaming etc whichwill be supplemented by various other innovative services & products.

This acquisition along with our recent acquisition of Cellucom aims to improve the retailcapillarity of the organization.It also reaffirms our commitment towards the sector and helps usboost our customer profile with an increase in reach and enhancement of the product portfolio.added Mr. Dilip Modi. However, the purchase price of the transaction was not disclosed.

The completion of this acquisition represents a significant landmark for us in our Endeavour tocreate value accretion across different business verticals within the telecom industry, founder ofGlobal Access Siraj Fulara said.

Going forward, we will continue to connect with Indias booming telecom market by providingconsumers with affordably stylish cube mobile handsets through our distribution arm,Telelogix.

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We see huge potential for growth in the mobile handsets market in India, and with cube boastingof several consumer- friendly and next generation features, we believe we are well placed togrow rapidly in the dual GSM mobile handset manufacturing marke t, Global Access co-founderMohsin Fulara said.

[The original story published had stated incorrectly that Global Access acquired Spice Retail.The story was incorrect. Above new item is the corrected version]

Spice Retail Ltd today announced acquisition of Global Access, a Karnataka-based retail chain.This acquisition will help Spice Retail to tap the state as well as the regional market.Commenting on the acquisition Mr. Dilip Modi, Managing Director, Spice Televentures said,Retail in India is complex; and we being a pioneer in mobile retailing in the country realise itsnuances.

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FUTURE TRENDS IN MOBILE

With every major mobile phone release, users are treated to an ever-expanding list of advancedfeatures. Some are more useful than others, but they represent an industry that is always on themove.

The next big feature to make our lives easier is usually only an upgrade away but we've decidedto gaze a little further into the future as we anticipate where manufacturers will go next with theirproducts. Here is our top 10 future Smartphone features.

Projection

We don't have to look too far into the future for this one, with Samsung's Beam handset alreadyoffering projection, albeit in a fairly primitive form and more advanced Android based handsetson the horizon. Basic or not though, the Beam is a ground breaking device, and in projection wesee a feature which we think will become a staple in future releases.

Being able to sit down in a conference room and simply view a presentation or video withoutwaiting for laptops to be plugged in or faulty cables to be swapped out would be breath of freshair for most business users. As technology advances we will see the extension of projection intothe video conferencing environment and others.

Looking further into the future we should see mobile devices packing holographic projection.The technology, which is in its infancy currently, offers a full three-dimensional rendering of thesubject and would be invaluable to any designer or architect. People in the medical profession

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may have to wait a while longer for full body holographics but it's certainly not a flight of fancyto assume it will arrive.

Advanced imaging

Every new camera phone released is touted as a 'compact camera replacement' but with theadvancement made in the camera industry they seldom live up to their hype. We're set to get aglimpse of what's in store though with the upcoming release of Nokia's N8 Smartphone, whichcarries an eight megapixel sensor and Carl Zeiss optics.

We've also seen huge advances in video recording, with Samsung's Galaxy S and Apple's muchvaunted iPhone 4 offering 720P capture, with HTC's Desire HD also entering the fray with 720PHD video capability.

As good as these features are, they aren't good enough to usurp a compact DV or still camera andthe future may well see a further coming together of big names in the photography and mobile

world as industry leaders in both fields realise that people don't want to carry a camera and amobile device. So expect to see 12 megapixels and 1080P capture, huge on-board storage andeven full editing on the hoof with Photoshop and Premier among the software being used.

Augmented reality

Augmented reality is the future. As end-users we've had our initiation with Google's 'Goggles','Layar', 'Wikitude' and 'Last Minutes Nru', among others, but the flow of AR technology into themarketplace is only just beginning.

We can look forward to true location awareness, enabling clients to view couriers progress in

real-time, AR for emergency services, showing the location of victims of crime or accident bytheir cellular signal and many other greatly useful applications to make our professional livesmore efficient and safer.

Aside from general advancement in AR apps, we can also expect a range of devices offering ARreplacements for traditional methods of human input, ranging from projected keyboards andtouchpads to eye-dialing your phone via a heads-up display while driving. AR is also likely tofill the void between 2D projection and holographic, allowing users to conference and work in aCG environment, sharing information and tools and interacting via virtual controls andworkspaces.

The application of AR technology will go beyond smart phones though. Indeed, expect to seeaugmented advertising hoardings and other interactive media as the norm in the coming years.

Tablets like Dell's Streak and Nokia's N900 we've been given almost complete desktopfunctionality in the palm of our hand.

The successors to those devices will be empowered by multi-core processors, advanced graphicprocessing units and more RAM and ROM than you can shake a stick at. Enabling users to carry

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out every task they could want on their handheld, and de-centralizing the workplace in ways notseen since the introduction of the World Wide Web. Expect to see super-mobile, super-powerfuldevices that you can plug into your display when you're in the office and work on when you'reon the move.

In the more immediate future we can expect to see Nokia's follow up to the geek-friendly N900,sporting ARM's latest Cortex-A9 processor and a lush capacitive touch screen, and no doubt thenext generation of Apple's iPod, which also runs on hardware provided by the British chipmanufacturer. The iPad may have divided the community like the business equivalent ofmarmite, but it certainly heralded a new approach to super-mobile computing which we feel willbe the standard in years to come.

Mobile cloud

Along with the power and flexibility of tomorrow's devices we should see a leap to cloudcomputing in the mobile market.

With smaller, more powerful devices having the lion's share of their hard work done remotely,users could expect to have all the power that they need without having the suit ripping formfactor to go with it. Also, the de-centralized storage of documents, photographs and other datawould enable users to work seamlessly with colleagues and even share devices without loss ofdata.

The removal of brand-based constraints from applications would also be a firm benefit withmobile cloud implementation, any device, any app; so long as it's registered on the network. Webelieve the mobile cloud would also see the distillation of mobile operating systems, leavingusers with a quicker, more labor efficient experience when working on their devices.

The mobile cloud is already in use in certain applications such as Google's Gmail and Apple'sMobile Me, but with more extensive usage network infrastructure would have to be fast andstable enough to support the high amount of data transfer needed to make such a concept viablewhich leads us on to our next point.

4G and beyond

The arrival of 4G is imminent and with it comes a new array of functionality and speed toenhance our mobile lives. Higher specked hardware and improved network infrastructure willprovide businesses with a fast and stable data connection, and the next generation of

applications, some of which we have already touched on, will run smoothly and - hopefully -without a hiccup.

Keeping you connected is only part of it, the higher speeds afforded users by 4G technology willallow the delivery of high-quality media to clients, enabling you to get your marketing materialsout into the world that much faster.

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With a new mobile generation coming around roughly every 10 years, we can expect to see 5Gimplemented fully by 2020, and following current projections will likely see peak data speeds of1Gbps.

Biometrics

As mobile devices evolve into more than just communications tools, security becomes ever moreimportant. Priceless data has famously been left on trains and in cars and the potential loss ofrevenue from such an oversight could be huge, not to mention the embarrassment to yourcompany.

Enter biometric security.

Fujitsu has already begun rolling out fingerprint based biometric security across some of itsrange and in the near future voice or even inner-ear activated devices will be widely available,allowing corporations to protect their data fully when it's not in use.

Other uses could include individual workspaces within a single device, enabling a user to pickthe device up and have his or her data downloaded automatically, once their identity has beenconfirmeda function which could prove invaluable with shared hardware.

As our mobiles become less exception and more norm the concept of all forms of necessary databeing held within our device is gathering momentum. Our credit cards, passports, insurancedocuments etc. could all be carried around with us in our hip pocket, securely protected andunable to be used without our presence.

Operating systems

Current mobile operating systems are almost unrecognizable when compared to the basic userinterfaces of a few years a go. With every release Google's Android is becoming faster and morestable and Apple strives to add more powerful features to its cleanly designed iOS.

The divide between mobile OS and desktop OS is narrowing though and in the future we expectto see much closer integration between the two. Following the lead of the MeeGo project we'removing toward true multi-platform operating system, one which can be installed on your netbook, Smartphone and workstation to allow you a seamless working environment.

We've already touched upon mobile cloud computing and the possibility of a true cloud

operating system in the mould of Google's Chrome OS really excites us, it also becomes moreplausible with the upcoming introduction of 4G technology.

Design possibilities

With the implementation of some of the technologies we've discussed the door is left open fornew and more convenient form factors to emerge.

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Wrist watches and long, pen-like devices have been seen on the market before but are neverviewed as anything more than a quirk but with evolving technology allowing manufacturers tosqueeze in everything a user needs they needn't be constrained by shape and size any longer.Think all-in-one earpiece devices, working fully from voice recognition or spectacles with an ARdisplay in one lens, the possibilities are huge and manufacturers will be able to tailor devices to

specific professions with greater and greater ease.

The svelte tablet won't be disappearing though but we expect them to get thinner and tougher,with higher resolution displays and longer life batteries.

Environmental awareness

This may not be a popular choice currently but the implications of sourcing a product fromsustainable, fully recyclable and non-toxic materials are far greater than any one of us cancurrently see.

Aside from the far-reaching environmental consequences of irresponsible manufacture we havethe added concerns of demand far outstripping supply when it comes to the materials used tobuild our important devices.

Sony Ericsson has taken steps towards a range of eco-friendly devices with its GreenHeartinitiative, which promises lower carbon emissions, reduced paper usage and between 50 and 100per cent recycled plastics used in production. These points not only benefit Mother Naturethough, as sustainable materials also serve to keep production steady and with lower transportcosts.

Another feature which we fully expect to see in future devices is solar panel integration or other

eco-charging solutions. What could be better than saving money whilst saving the planet?

Is it a stretch to expect our children to be educated in the development and use of mobile tech inthe future? Will there be an entirely new, life-changing device, which supersedes all othersrendering them obsolete?

Reference:http://www.itpro.co.uk/625501/top-10-future-trends-for-mobile-phones

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CHAPTER 8

PEST ANALYSIS OF MOBILE

PEST Analysis

A PEST analysis (also sometimes called a STEP, PESTLE or STEEP analysis) looks at theexternal business environment. PEST stands forPolitical, Economic, Socio-cultural andTechnological. Technological factors in this case, include ecological / environmental aspects -the second E in STEEP and PESTLE, while legislative factors are included under Political (the Lin PESTLE). The analysis examines the impact of each of these factors (and their interplay witheach other) on the business. The results can then be used to take advantage of opportunities andto make contingency plans for threats.

Political Factors:When examining political factors, you need to look at any political changes that could affectyour business. What laws are being drafted? What global changes are occurring? Legislation onmaternity rights, data protection, health & safety, environmental policy, should be considered,for example.

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As an example, take a company employing a large number of women. Changes in maternityrights may have a major impact on such a business - and the aware business will keep an eye outfor changes in such legislation.

Economic Factors:

Often the political factors spill over into economic factors for example; tax is usually decided bypoliticians, based on a mixture of political and economic factors. Interest rates, in many countriesare decided by a central bank, but political factors may still be important. The fall of the SovietUnion caught most businesses and Western Governments by surprise - but not all. Somecompanies - notably Shell Petroleum - had picked up signals that all was not well in Russia.Many of these were related to economic problems within the Soviet Union.

Other economic factors include exchange rates, inflation levels, income growth, debt & savinglevels (which impact available money) and consumer & business confidence. The current state ofworld stock markets is a typical example of the volatility of economic factors.

These areas are global, but it is also important to look at factors affecting individual industries.Are paper costs rising? For a book, magazine or newspaper publisher, the price of paper is acrucial economic measure. The UK software industry has complained of a shortage of computerprogrammers - driving up wage costs. Again - the global picture can be important. Somecompanies are now using programmers in countries like India for software development. Thishelps them keep costs down - and leads to competitive advantage over companies with highercosts.

Social Factors:Finally, all this influences and is influenced by social factors - the elements that build society.Social factors influence people's choices and include the beliefs, values and attitudes of society.

So understanding changes in this area can be crucial. Such changes can impact purchasingbehavior. Typical things to look at for each of these include:

consumer attitudes to your product & industry environmental issues (especially if your product involves hazardous or potentially

damaging production processes) The role of women in Society - attitudes to health - attitudes to wealth - attitudes to age

(children, the elderly, etc.).

Added complications when looking at social and cultural factors are differences in ethnic andsocial groups. Not all groups have the same attitudes - and this impacts how they view productsand services. Demographic changes can also play a major part.

Technological Factors:Advances in technology can have a major impact on business success - with companies that failto keep up often going out of business. Technological change impacts Sociocultural attitudes.For example the way people spend their leisure has changed dramatically over the last 30 or soyears. As well as advances in your own industry, think about the likely impact of newtechnologies - the Internet, nanotechnology, mobile phones, and the increasing advances in

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computing and computers. Look out for any technology that could make producing your producteasier. And watch out for the technology that could make your product obsolete. (As an example,think about the potential impact that video-conferencing could have on the business travelmarket. Why spend hours and much money travelling some distance for a meeting, when allparticipants can join in - face-to-face - through a video-conference that lacks only the physical

presence of the attendees.)

Advantage of a PEST analysis:

One way of compiling a PEST analysis for your business is to take a LARGE sheet of paper. Inthe top left corner, put the heading Political; in the top right corner, Economic; bottom left =Sociocultural; bottom right= technological.

For each heading, think of every factor that could possibly have an impact on your business.Think laterally - just because something seems unlikely does not mean that it will not have aninfluence in the future.

Having compiled a list of key factors, think of inter-relationships between factors. For example,the rise of the Internet (technological factors) is likely to influence consumer purchasing (socialfactors) - while an awareness of prices in other markets through electronic commerce may leadto a narrowing of cross-border price differences (economic).

Connect up all inter-related factors. You will find that some areas have more connections thanothers. These are often the areas that will have the greatest potential impact on your company.These are the aspects that you most need to be aware of, in your marketing planning - andrepresent future opportunities and threats.

The final stage in a PEST analysis is to use the results.

Prepare contingency plans for any threats identified. If there are factors that lead to businessopportunities, then include these in your planning. For example, your target customer group maybe growing faster than other sectors. This is an opportunity to increase production to takeadvantage of more potential customers.

However before you can use the results effectively, you should also develop an understanding ofyour own companys capabilities.

Reference:http://www.marketing-intelligence.co.uk/help/Q%26A/question24.htm

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CHAPTER 9

PORTERS 5 FORCES MODEL

1. Threat of New Entrants - LowWhile evidence suggests companies often find it difficult to identify new competitors that is notthe case in the mobile phone industry. Because the mobile phone operators must compete forspectrum licenses, they can easily identify their competitors in the individual markets. The threatof new entrants bringing additional production capacity should be downplayed in this industry,because technology should assumed to be similar and thus new entrants do not necessarily bringadditional production capacity, nor does their entry hold consumer cost down. The fixed-lineoperators do however present a risk to mobile phone operators, because they will certainlyprovide extra production capacity and lower the consumer costs as a result of this competition.

2. Barriers to Entry - High

(a) Economies of Scale - ModerateThe mobile phone companies were expanding internationally at a fast pace, but the potentialbenefits of economies of scale in R&D and network exploitation remained unclear. Mobilephone manufacturers did enjoy great economies of scale in production, marketing and R&D,which allowed the three major producers to dominate the industry and sustain a competitiveadvantage. Strategic alliances with these producers would allow the major mobile phoneoperators to share in these economies, to lower costs for both companies and to minimize thethreat of new entrants.(b) Product Differentiation - LowThere was no evidence that mobile phone operators achieved product differentiation. In fact,mobile phone manufacturing brands were more important to consumers than those of the mobilephone operators. As a result, mobile phone operator product differentiation could only besuccessful if in conjunction with the major phone manufacturer brands. The multimedia contentof mobile phone operators could prove to be a successful strategy for product differentiation inthe future.

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(c) Capital Requirements - High

Compared to capital requirements of the telecommunications industry as a whole, the mobilephone industry capital requirements were low. However, within the mobile phone industry,capital requirements present a significant barrier to entry. Because spectrum licenses went up forauction, only the most financially fit and liquid mobile phone operators could acquire these

essential components of their business strategy.One method of negating these stiff capital requirements within the mobile phone industry was toacquire or form alliances with existing operators in other countries. These arrangements tookshape through the use of roaming agreements, allowing one operators customers to use theirallies networkwhen their own was unavailable.(d) Switching Costs - Low

Because product differentiation is low between the mobile phone operators, switching costs arebound to be low. If multimedia content becomes a major opportunity for product differentiationas is expected, this could raise the switching costs for customers.Switching costs could also be higher if mobile phone operators and manufacturers decided tocreate and operate equipment that was not compatible across mobile phone operators. This seems

unlikely, as it would also reduce the ability of mobile phone operators to put in place roamingagreements with their allies.(e) Access to Distribution Channels - Low

European regulations governed distribution channels through the use of spectrum licenses. Thispolicy of auctioning licenses to mobile phone operators should be considered a strong barrier tonew entrants.(f) Cost Disadvantages Independent of Scale - Low

There are no cost advantages that the mobile phone operators have established that new entrantscannot duplicate.(g) Government Policy - Low

Government controls the entry into the mobile phone industry through their spectrum licenses.Deregulation would pose a significant threat to existing mobile phone operators, but does notseem to have been on the horizon.

3. Expected Retaliation - High

Mobile phone operators have a major stake in the industry through the purchase of licenses andinvestment in fixed assets with few, if any, alternative uses. These mobile phone operators alsohave substantial resources.New entrants pose a threat in the sense that industry growth is fast and seemingly unconstrained,except for the role of licenses. Vodafone should expect retaliation by its competitors if theyacquire Mannesmann, a point where they will have significantly less financial slack than theircompetitors.

4. Bargaining Power of Suppliers - HighMobile phone manufacturers are the primary supplier to the mobile phone operator market.These manufacturers were dominated by Ericsson, Nokia, and Motorola with 61 percent of themarket. Because the mobile phone manufacturing brands were more important to consumers thanthe mobile phone operators themselves, bargaining power of suppliers was high. Industry firmsare not a significant customer for the supplier group because the suppliers operate in far moreinternational locations and markets than the mobile phone operators. Suppliers goods are criticalto buyers' marketplace success. Mobile phone manufacturers could integrate forward into the

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industry. These suppliers were credible, having substantial resource and provide a highlydifferentiated product.

5. Bargaining Power of Buyers - HighThere was very little differentiation among mobile phone operators, and the switching costs arelow. Accordingly, the industry firms battle for higher quality, greater levels of service, and lower

prices than their competitors, and the consumers benefit.Mobile phone customers purchase the entire portion of the mobile phone operator's industryoutput. The sales of the mobile phone service account for the entire amount of the seller's annualrevenues. The mobile phone customers could switch to another mobile phone operator at little, ifany, cost. The mobile phone industry's products are undifferentiated and standardized. Thebuyers do not pose a credible threat of backward integration because of the high capitalrequirements.

6. Threat of Substitute Products - Low

Substitute products for the mobile phone industry could be considered fixed-line phone productsif convergence is not considered to exist. This substitute products price is not lower, and itsquality and performance capabilities are negligible compared to mobile phone products.

Switching costs are low but the advantage goes to the mobile phone industry because there is agreater chance of switching to mobile phones from fixed-line phones than the other way around.

7. Intensity of Rivalry among Competitors - High

(a) Numerous or Equally Balanced Competitors HighThere are many equally balanced competitors in the mobile phone industry, and industries withthese characteristics tend to have strong rivalries.(a) Slow Industry Growth - Low

Because the mobile phone market is undoubtedly growing, there is little pressure to takecustomers from competitors. There are many equally balanced competitors in the mobile phoneindustry, and industries with these characteristics tend to have strong rivalries.(b) Slow Industry Growth - Low

Because the mobile phone market is undoubtedly growing, there is little pressure to takecustomers from competitors.(c) High Fixed Costs or High Storage Costs - High

Mobile phone operators have high fixed costs due to spectrum licensing and the establishment ofwireless network points of access. As a result, these mobile phone companies try to maximizetheir productive capacity, which leads to excess capacity and intense rivalry.(d) Lack of Differentiation or Low Switching Costs - HighBecause buyers in the mobile phone industry believe mobile phone service is a commodity,rivalry within the mobile phone industry is high. Switching costs for mobile phone consumersare also low, so competitors can easily attract buyers through pricing and service offerings.(e) High Strategic Stakes - HighNearly all operators in the mobile phone industry considered it their primary market, socompetitive rivalry is intense. Europe is a dense market, high strategic stakes also exist becauseof this geographic location. These competitors want as much of the markets as then can get.(f) High Exit Barriers - LowSpecialized assets such as spectrum licenses maintain a high resale value. Fixed costs of exit,strategic interrelationships, emotional barriers, government and social restrictions are allnegligible.

Reference:http://www.cybozone.com/vcu/Vodafone_Air_Touch_-The_Acquisition_of_Mannesmann.pdf

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CHAPTER 10

COMPETITIVE ANALYSIS WITH MARKET

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MOBILE PLAYERS IN INDIAN MARKET

The Indian telecom industryis the worlds fastest growing industry with 792 million mobilephone subscribers as of February 2011. It is also the second largest telecommunication networkin the world in terms of number of wireless connections after China. The industry will reacharound $80 billion in revenues by next year showing an astounding CAGR of over 25% and willemploy a stupendous 1 crores employees making it one of the biggest value creators in India inrecent times. However the telecom companies in India after enjoying a boom period in the early2000s has faced a couple of tough years with hyper competition leading to a price war in auctionof 3G spectrum. This was followed by one of the most high profile corruption scandals in thecountry which resulted in the jailing of the former telecom minister in the 2nd auction of 2Gspectrum. Most of the telecom companies have been found to be implicated in colluding withsleazy politicians/bureaucrats in looting the Indian taxpayers. India is one of the most corrupt in

the country and after the 2G Scam; the telecom sector is giving it close competition for the No.1spot in corruption

Despite these problems, India is set to see another spurt of growth as 3G in India has thepotential to bring Internet to Indias massively under penetrated population which has phones butnot computers.

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India is soon going to emerge as the second biggest mobile market only after China withbroadband being another area that will witness massive growth due to increase in Internet usage

The fact that more than two dozen companies have submitted over 500 applications for telecomlicenses across India clearly underlines the inherent growth potential of this crucial sector. Apart

from leading global telecom giants that are in the fray in tie-ups with various Indian companies,those having presence in real estate, information technology, automobile, finance andinfrastructure sectors want to be a part of this splendid growth story.

Despite having the third largest telecom subscriber base in the world (24-crore) after China andthe US, its tele-density at 21 per cent is among the lowest. Even countries like Russia, Brazil andThailand are far ahead of India. It is the projections that India would have over 50-croresubscribers and a tele-density of 36 per cent by 2010 is attracting new players to tap this hugemarket.

The key drivers of this growth would be the mobile and broadband services. While India is soon

going to emerge as the second biggest mobile market only after China, broadband will be anotherarea that will witness massive growth due to increase in Internet usage and introduction of newservices like IPTV and m-commerce.

In fact, m-commerce that will facilitate business transactions through mobile devices like mobilephones and smart phones has immense potential.

Notwithstanding the complex spectrum issue, companies are hopeful that the Government wouldprovide them enough radio frequencies to deliver advanced telecom services.

The telecom sector is also seen as a key driver behind consistent economic growth, and the

Government cannot afford to scuttle this momentum. As the competition gets fiercer in thetelecom sector, it will be the consumers who would be benefited the most. Already India has thecheapest tariffs in the world, and with more players joining the race, they can expect to get moresops like attractive tariffs, additional value-added services, cheaper handsets and much more.

Some leading telecom companies like Reliance Communications are already providing mobilehandsets at sub-Rs.1, 000 and free talk time on certain plans, entry of more companies will seerollout of various innovative packages and plans to attract subscribers, particularly in smalltowns and rural areas. And as the recent entrantVodafoneunfolds its strategy for the Indianmarket, a mobile handset at Rs. 500 with free lifetime connection might soon become a realityfor Indian customers.

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POSITIONING OF MOBILE COMPANIES IN INDIA

The country's telecom regulator is TRAI.

Rank Operator TechnologySubscribers

(in millions)Ownership

1 Airtel GSM, EDGE

85.65 [62]

(December

2008)

Bharti Tele-Ventures,

Singapore

Telecommunications

(30.84%) and Vodafone

(4.4%)

2 Reliance

CdmaOneKey advantageover other (non-operator)

retailers - presence in both

retailing and airtime

Key advantage overoperators - not tied to

technology (as an

MVNO)

GSM

61.34 [63]

(December2008)

Reliance - Anil Dhirubhai

Ambani Group

3 Vodafone GSM, EDGE 60.93 [64] Vodafone (67%) & Essar

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(December

2008)

Group (33%)

4 BSNL GSM, GPRS, EDGE,HSDPA

46.22 [65]

(December

2008)

State-owned

5Idea

CellularGSM, GPRS, EDGE

34.21 [66]

(December

2008)

Aditya Birla Group

6Tata

IndicomCdmaOne

31.76 [67]

(December

2008)

Tata Group

7 Aircel GSM

16.07 [68]

(December

2008)

Maxis Communications &

Apollo Hospital

8 MTNL GSM,HSDPA

4.18 [69]

(December

2008)

State-owned

9 Spice GSM

3.80 [70]

(December

2008)

Spice Corp and Telekom

Malaysia

10BPL

Mobile

GSM, GPRS

1.94 [71]

(December

2008)

Essar Group

11ping

mobileGSM

0.38 [72]

(December

2008)

HFCL Infotel

12Hello

rainbowcdma

0.36 [73]

(December

2008)

Sistema (73.71%) & Shyam

Group (23.79%)

Although, Nokia has been losing its Mobile handset market share in troves, it has not stopped it

from becoming the most trusted brand in India, 3rd year in succession according to Brand Equitysurvey. Nokia first debuted at 71 in 2004, moved to 44th in 2006, 4th in 2007 and then shot up tonumber one and has been there since.

Micromax, Lava, Spice, Zen, Karbonn and many other Indian handset brands are making morethan a mark in the market today.

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They have together occupied more than 14% market share. The best part for them is that this hasbeen at the cost of certain brands specifically Nokia losing its market share by more than 12%over the past year. So the question is what makes them tick and will they be able to survive?

Most of these handsets can be sourced from China at as low as US$ 16 with a 1% duty and at

prices half that of the multinational brands. The cheapest handset also offers a good margin. Butcompetition is increasing thick and fast. The question remains as to how well these brandsdifferentiate their offerings.

But at the end of the day, the biggest factor which attracts people is the price. Before Micromaxcame with its QWERTY phone for Rs 5,000, such phones werent available for less than Rs10,000. Lava as well as Micromax is working overtime to launch 3G as well as smart phones forless than Rs 6,000.

The most interesting aspect of their strategy is that they are targeting villages first, cities later.They want to build a strong user base first where they have a greater opportunity. Poor recall of

multinational brands in Rural India and the price factor has helped them gain a good marketshare in these areas. Spice claims to have 18% market share next only to Nokia in Rajasthan. Anew entrant, MVL plans on using road shows as part of its marketing campaign. It also plans tosell its phones through post offices.

Technology has also been an important factor for these brands to develop themselves strongly.

An inbuilt mosquito repellent, longlife batteries, dual SIM card reader, fake currencyreader they have it all. But the most important part to succeed in this highly competitive

game is to innovate and that too quickly and faster than your competitors. Companies shouldsearch for newer methods of continuously reducing the product development cycle.

These brands have also signed onto many Bollywood stars as their Brand Ambassadors as wellas invested heavily in cricket especially the Indian Premier League [Micromax]. This is whatsells in India and they feel that they could differentiate themselves by this move.

The long term success of Indian handset brands depends on their differentiation, competency insmart phone development and also a strong supply chain. Foreign brands have alreadydismissed their competition saying that they dont have the ability to effectively compete.

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STRENGTH OF MOBILE PHONES IN INDIA

In 2009 Etisalat has announced that its Indian unit, erstwhile Swan Telecom (owned byDynamix Balwas Realty and Reliance Communications),[34] headquartered in Mumbai, isrenamed to Etisalat DB Telecom India Pvt. Ltd Telecom Renamed Etisalat Telecom India

Pvt. Ltd. The business unit has been awarded Unified Services Access License in 15 circles -Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Mumbai, Punjab,Rajasthan, Tamil Nadu (including Chennai), Uttar Pradesh (East), Uttar Pradesh (West),Madhya Pradesh and Bihar. In April 2010 Etisalat began signal testing in Chennai, Delhi &NCR , Maharashtra & Goa , Mumbai and Gujarat. In May 2010, Etisalat was in talks to buy25% stake in Reliance Communications, but the deal was not finalised.

In 2010, following the $39 billion 2G spectrum scam, Etisalat DB, the Indian subsidiary ofthe company, was stopped from buying a stake in a Chennai-based company due toobjections raised by the India's home ministry (MHA). Etisalat DB was not allowed to buyback the 5.27 per cent stake held by Chennai-based Genex Exim Ventures since the home

ministry raised objections based largely on security concerns. The MHA had pointed out fourissues that needed to be resolved before allowing the company to come into Etisalat DB, acompany that got scarce 2G spectrum at allegedly throwaway prices, First, vice-chairmanShahid Balwa should not be involved in the operations of the company in any capacity,because of his connections with underworld don Dawood Ibrahim, second, the MHA raisedobjections about the commercial relationship between the Dubai-based Etisalat Group andChinas Huawei. The MHA suspects, Huawei has links with Chinas Peoples LiberationArmythe countrys military organization of all land, sea, strategic missile and air forces

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and has the capacity to manipulate equipment supply, third, it raised objections aboutEtisalats presence in Pakistan and it's connection with Pakistan's intelligence agency ISI.Etisalat owns a 26% stake in Pakistan Telecommunications and has a subscriber base of 3million in Afghanistan and fourth, the MHA has also expressed concerns about the telecomsurveillance software Etisalat had used in a Blackberry service it had introduced in the UAE

and recommended that the company should not be allowed to offer Blackberry services inIndia.

Strength could be:

Your specialist marketing expertise. A new, innovative product or service. Location of your business. Quality processes and procedures. Any other aspect of your business that adds value to your product or service.

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CHAPTER 11

CONSUMER NEED ANALYSIS

The Customer Analysis section of the business plan assesses the customer segments that thecompany serves. In it, the company must:

1. Identify its target customers

2. Convey the needs of these customers

3. Show how its products and services satisfy these needs

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CONSUMER SEGMENTS

Ask yourself a series of strategic questions:

- Do you know who your customers are?

- Do you know the characteristics of your customers?

- Do you know what influences your customers when making purchasing decisions?

- Do you know where your customers live, work and play?

- Do you know who amongst your customers are the most profitable and those who are a drag

on your resources?

- Do you know who else can be a profitable customer yet is currently not being served by yourcompany?

In other words, do you segment the entire population within your market (not just customers)into relatively homogeneous groups that can be measured, analyzed, and targeted?

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Consumer segmentation is the process of classifying people into groups that have some set ofsimilar characteristics, resulting in the ability to be studied and targeted.

The most basic method is to segment by simple demographics such as age, income, or maritalstatus. The goal is to identify relatively homogeneous groups with similar behavior that will

assist in customizing the message and/or offer for each segment.

Some companies target only one macro group, such as the AARP attracting anyone 50 years oldor older. Others have much more sophisticated segmentation schemes, using dozens, or evenhundreds of variables.

The advent of accessible computer technology, the development of new statistical methods, andthe availability of US Census data have all contributed to a whole new industry specializing inmulti-tiered consumer segmentation. Add to this the standardization of geographic definitionsand you now have a powerful basket of measurable variables that can help segment thepopulation in a very detailed fashion.

XTREMEimpakt offers you the ability to classify, study and target consumers (both your owncustomers and the general population) using two different, yet partially correlated segmentationtypologies:

1 Geodemographic

2 Psychographics

Both systems provide you with incredible insight into the consumer market, generating results

that are both measurable and actionable.

In general, this segmentation method links the sciences of demography (the study of humanpopulation dynamics), geography and sociology. Its premise is that people with similar culturalbackgrounds, means and perspectives naturally gravitate toward one another, resulting inrelatively homogeneous communities (birds of a feather flock together).

The theory goes, once settled in, people naturally emulate their neighbors, adopt similar socialvalues, tastes and expectations and, most important to marketers, share similar patterns ofconsumer behavior toward products, services, media and promotions.

Thus, you are able to classify neighborhoods and their households into clusters or groups ofneighborhoods based on their underlying socio-economic and demographic composition.

A number of companies specialize in geodemography, applying their own set of variables andsegmentation techniques to delineate the entire US population into a number of clusters that arelarge enough to provide substantial distinctions between groups, yet are small enough to bemanageable.

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You can use these clusters to segment your customer base, identify profitable groups, find newcustomers, locate sites for stores, buy advertising, target direct mail, guide promotional activities,and develop new products.

XTREMEimpakt is in a position to help you incorporate geodemographic segmentation into your

marketing strategy. Very quickly you will see your customer base in a whole new light. You willbe able to isolate groups that are most profitable (and least profitable), then build a highlytargeted campaign to attract those individuals of most interest to your company. You will then beable to measure the effectiveness of all your marketing elements and make educated adjustmentsand refinements for each subsequent round of marketing and promotional activities.

To further target your marketing efforts, you should have a method to not only determine who isor will buy your product, but identify what makes them wantto buy as well.

Psychographic segmentation is a powerful method to delineate consumers based on theirpersonalities, values, attitudes, interests, and/or lifestyles - - that is, you are identifying and

measuring those attributes (behavioral, economic and interpersonal) that drive consumerbehavior.

As part of our underlying objective of developing marketing and promotional programs thatmake an IMPACT, we have partnered with the top provider of psychographic segmentation toidentify the motivations of your best customers and prospects, thus leading to the most effectivemessage and method of delivery.

Every segmentation typology on the market today includes some sort of link to geography. This,of course, is criti