One of the most commonly used solutions in the market can be found in the mobile and communication industry. As the market for mobile communication is continuously expanding with some world areas experiencing market saturation, mobile operator are trying to differentiate their product offering (Strouse ). One of the ways to do this is to bundle the provision of the mobile connection with the sale of mobile phones. The combination of the two makes the final offer more attractive to the customers and helps companies to expand their options in designing marketing efforts. The target group for such solutions is very broad as the benefits are quite diverse. The only limiting factor in selecting the target group is the level of commitment people are willing to make. Thus, customers, who need connection only for a short period of time, for example if they are in the country only for a brief period, would not be attracted by the combined solution offered by the mobile operators. It also related to the travelling customer and to those, who often use different sim-cards. Such customers would not be attracted by the offer, as the combined solutions often include the so called “sim-lock”, which implies that the services of other operators cannot be used on the particular phone.
There are several sources of value added for the customer in such an solution. The first one relates to the possibility to obtain preferred phones at a lower price (at least in the short-run). The cost of some cell phones, in particular smartphones, is prohibitive for some people, especially in developing countries. That is why the chance to delay the payment for the mobile phone seems to be an attractive offer. Moreover, such a strategy helps producers of mobile phones to promote their products and in some cases even to increase margins by raising the price in return for the payment delay.
The second benefit for the customers is related to the cost of connection services. As the contracts with mobile operators are usually signed for a longer period of time in order to cover the cost of the cell phone, customers are also offered discounts and special offers on the connection services. The operator in this case is benefitting from higher network load stability, long-term relationships and revenue predictability, as customers are less likely to switch operators before the expiration of the contract.. Some of the savings can be thus transferred to the customers in the form of lower prices.
The third benefit associated with bundling of mobile phones and connection services relates to the higher quality of service offering. Longer periods contract and stronger relationship with customers help to develop more customized services for their clients. Customers also gain higher bargaining power and can request better service in return. Furthermore, the data about customer preferences collected in the process could be utilized both by mobile operators and by phone manufacturers in order to enhance their products in the future.
The marketing process in telecommunication companies is already changing today. It is now not enough just to offer high quality service or low prices. Voice calls are becoming more of a commodity, that is why marketing campaigns should focus more on differentiating product offerings and on customizing services to the (Dziri ) customer needs. In this case, marketing campaigns should include not only the connection services but also cell phone offers and any additional products or services.
Marketing process would also change in terms of partner relationships. With the combined solutions mobile operators should work closely together with phone manufacturers in order to develop joint marketing campaigns. This could result in mutual benefits as it will increase the number of distribution channels and help to reduce marketing expenditures. The combined solutions could be distributed both through the offices of the mobile operators and through retail channels (both online and offline) that are currently used by cell phone manufacturers. Moreover, mobile operators could leverage on the high brand recognition of mobile phone manufacturers. Hence, exclusive contracts with manufacturers would help mobile operators to increase customer loyalty and to attract more clients.
Dziri, Ramzi. Avoiding strategic drifts in a hypercompetitive market: Analysis of Nokia’s
position in the mobile phone industry and suggestions. GRIN Verlag, 2011. Print.
