Innovation in TelecommunicationMKTG6250U: Talib AnkoudBusiness Marketing 211240819
2 MKTG6250U: Business MarketingTable Of Content• Executive Summary• Telecommunication Industry Background• Business Marketing Issue: Innovation• Innovation as a Business Marketing Issue In Telecommunication Industry• Innovation as a Business Marketing Issue In France Telecom• The Implication for Business Marketing• Key Learning• Appendices
3 MKTG6250U: Business Marketing Executive Summary• Globally, Telecommunication industry has high opportunities of growth.• Innovation is in the core competencies of the Telecommunication industry in both, B2C and B2B segments.• In the Business to Business segment innovation is associated with • New products: • Friendly utilization: • Powerful Telecom Switches: • Reliable Network: • Strong Billing Systems: • Friendly Customer service:• France Telecom has been relying on innovation as an Enterprise solutions provider and as a customer• Innovation can help in decreasing costs and increasing sales (having more customers, and using the best tools)
4 MKTG6250U: Business Marketing Telecommunication Industry Background• March, 1876. First patent of a Telephone and first successful telephone transmission of clear speech• July, 1877. First telephone company: The Bell Telephone Company (Became AT&T later)• 1879. First International Division The International Bell Telephone Company (IBTC) of Brussels, Belgium• 1896: The Invention of the Radio• 1927: The Invention of Television.• 1930: The introduction of the Videophone• 1964: The standardization of the Fiber optical telecommunications• 1969: The introduction of the first Computer networking platform• 1981: The invention of the Analog cellular mobile phones• 1982: The first SMTP email• 1983: The introduction of Internet for individuals• 1998: The first Satellite phones• 20xx: The introduction of the New Generation Networks (1G, 2G, 3G,……)
5 MKTG6250U: Business Marketing Industry Analysis and Forecast• $132.5 billion of total revenues in 2010, representing a compound annual growth rate (CAGR) of 10% between 2006 and 2010• Market consumption volumes increased with a CAGR of 9% between 2006 and 2010, to reach a total of 1.3 billion units in 2010.• An anticipated CAGR of 10.5% for the five-year period 2010 - 2015, which is expected to drive the market to a value of $218 billion by the end of 2015.• Great opportunities in Asia: ▫ The European and Asia-Pacific markets grew with CAGRs of 2.4% and 13.1% respectively, over the same period, to reach respective values of $28.3 billion and $77.5 billion in 2010. ▫ They will grow with CAGRs of 6.8% and 12.6% respectively, over the same period, to reach respective values of $39.3 billion and $140.5 billion in 2015.
6 MKTG6250U: Business Marketing Industry Analysis and Forecast• Global mobile phones market value: $ million, 2006–10
7 MKTG6250U: Business Marketing Business Marketing Issue: Innovation• Innovation can be : • Planned with deliberate processes • Messy and disorderly • Disjointed • Replicated• The pioneers of innovation get numerous advantages such as: • Get to market faster • Use technology across a range of products • Introduce more products • Enjoy greater width of technologies
8 MKTG6250U: Business Marketing Innovation in Telecommunication• Innovation is in the core competencies of the Telecommunication industry in both, B2C and B2B segments.• In the Business to Business segment innovation is associated with • New products: Players in Telecommunication industry prefer offering new products seasonally. Sometimes the new products does not have a lot of new features comparing to the old ones. However, the demand in new products is always higher. • Friendly utilization: It is mainly related to innovation in design (shape, colors, etc…), video and audio features, gaming, and news. • Powerful Telecom Switches: Vendors such as Cisco, Nokia, Alcatel, and Siemens are the leaders in supplying powerful Telecom switches and. The competition is very high with the newcomers such as the Chinese vendor Huawei.
9 MKTG6250U: Business MarketingInnovation in Telecommunication 2• Reliable Network: The same vendors offer a wide variety of Antennas. The evolution to New Generation Networks (GPRS, UMTS, CDMA, etc ) has pushed them to innovate in this segment to offer more reliable networks and increase customers satisfaction.• Strong Billing Systems: In Telecom innovation in hardware is not enough. Software is also very important. Having strong billing systems decreases the customer frustration and increase the loyalty. Thus, companies providing such solution are always developing new products.• Friendly Customer service: Innovation is not only about products and goods but also about services. Designing new approaches to enhance customer services is a key factor of innovation in telecommunication.
10 MKTG6250U: Business Marketing Innovation In France TelecomNew products• As a Customer, France Telecom has many suppliers who regularly market their new products directly to France Telecom or indirectly by using the end-users preference to push France Telecom commercialize their products. • Directly: Vendors such as Samsung, Nokia, BlackBerry or Apple sign contracts with preference prices with France Telecom to commercialize their new mobiles. France Telecom can say “Yes” or “No” if the new products don’t respect certain level of innovation. • Indirectly: The vendors do not market directly to France Telecom. The success to some new products in the market push France Telecom to ask for commercialization rights.
11 MKTG6250U: Business Marketing Innovation In France TelecomNew products• As a service provider, France Telecom offers several types of plans to their customers. The customers might be individuals or corporations. New Plans must be innovative and present new features that are suitable for corporation needs •Innovation on voice service: Should be done to give more valuable and attractive voice service. Innovation on voice service could be free of charged to make calls to local destination or to make calls to the same network. •Innovation on SMS service: Could be giving a mount of free SMS per day, unlimited SMS package for the same corporation , free of charge to send SMS to the same network etc •Innovation on Data Service: Could be giving a mount of bytes traffic per day, free of charged to browse to the corporation sites, giving a discount while accessing internet using the corporation network etc
12 MKTG6250U: Business Marketing Innovation In France TelecomFriendly utilization• Enjoying using France Telecom products (And services) is always one of the most important concerns in France Telecom. • Design: FT provides mobile solutions to corporations that have people with different tastes in shapes, and colors. Thus, FT offering must not be the same for each corporation. • Documentation: Usually, FT’s enterprise solutions are complicated to use and normal documents are hard to read and understand. FT has given importance to innovate in editing documentation. • Cultural fit: FT has subsidiaries world wide. Thus, mobiles, call centers, billing systems, and enterprise solutions must fit the culture of the country within which FT is operating.
13 MKTG6250U: Business Marketing Innovation In France TelecomPowerful Telecom Switches• To have the most powerful switches, FT deals with the leaders in the industry.• Vendors such as Cisco, Nokia, Alcatel, and Siemens, while developing their marketing plans and their positioning statements they are sure that they emphasize on how their products are innovative.• On the FT side, they do not buy from the first providers. Usually, they take products for a trial period that can go to around 5 years. FT wants to be sure that the switches pass all the performance tests.• In this period the vendors keep working on new patches that update and correct if there are any problems detected by FT’s test teams.• Here, Innovation is a work team between the suppliers and the customer.
14 MKTG6250U: Business Marketing Innovation In France TelecomReliable Network• In the last decade the Telecom Industry has known a very fast evolution in terms of Telecom Protocols (GSM, GPRS, UMTS, etc)• FT is sure that its customers have access to these new technologies• While switching to the New Generation Networks FT has to be confident that customers can rely on the new networks.• Vendors supplying FT with the new Antennas have strong R&D departments specialized in new generation networks. They anticipate FT’s customers needs and provide FT with antennas that respect the latest standards and protocols.• FT’s radio engineers are among the best in Europe and in the world. They guarantee that the antennas that FT will buy are reliable and bring something new to FT’s customers.
15 MKTG6250U: Business Marketing Innovation In France TelecomStrong Billing Systems• FT’s customers are the least complaining customers in Europe about billing mistakes.• FT’s Billing Systems are quite similar to what other Telecom Providers have.• The difference is that FT’s software engineers innovate in customizing these billing system and make them match FT’s plans and FT’s customers needs in terms of billings.• Moreover, FT requires from companies developing such products to develop customizable patches and updates. FT pays a premium prices for those features.• Billing Systems Editors rely on their innovative products to increase sales with Telecom Providers.
16 MKTG6250U: Business Marketing Innovation In France TelecomFriendly Customer Service• Innovating in customer services was always hard for FT.• The Products supported by customer services and FT tries to innovate in them are: • Maintenance and repair: FT’s Enterprise Solutions are subjects of malfunctioning on out of order. Corporations usually are not satisfied with the quality of the customer service. • Consulting: FT via its consulting subsidiaries must innovate to find new approaches to do consulting. Expertise is not enough to deliver a strong consulting service. • Training: Training customers on new products is a major factor of service satisfaction. Non-conventional training methods would be a good strategy to gain this satisfaction.• Designing customized customer services is a key factor of innovation in telecommunication.
17 MKTG6250U: Business MarketingImplications for Business Marketing• As a provider, Innovation helps: • Increase sales • Develop a unique positioning statement and increase companies brand awareness • Generate interest with personalized catch for successful marketing • Differentiate from similar providers and attract new clients • Communicate as the expert and represent its brand professionally
18 MKTG6250U: Business MarketingImplications for Business Marketing• As a customer, Innovation helps: • Acquire the Products/Services that match our needs • Offer 24h/7j reliable Products/Service to our own Customers • Have the best deals in terms of quality/value • Decrease manual tasks with no added value • Reduce operating and maintenance costs • Reduce of building maintenance costs • Decrease interfering stocks
19 MKTG6250U: Business Marketing Key Learning• How to conduct an academic research related to Business Marketing• Companies who are Innovation oriented, do it in the both sides: as providers and as customers• Innovation can be a serious Business Marketing issue. It is associated to the whole value chain, from the suppliers until the end-users.• Innovation can also be intangible and associated to services• Innovation can help in decreasing costs and increasing sales (having more customers, and using the best tools)
20 MKTG6250U: Business Marketing Bibliography• Datamonitor. INDUSTRY PROFILE. Global Mobile Phones. Reference Code: 0199-0152 Publication Date: November 2011• Datamonitor. Company Profile. France Telecom. Publication Date: 22 Jul 2011• Euromonitor. Technology, Communications and Media: France. Country Briefing | 06 Nov 2009• Abdelillah Hamdouch, Esther Samuelides, 2001. Innovation’s dynamics in mobile phone services in France. Source: European Journal of Innovation Management Volume: 4 Issue: 3 2001 (retreived on http://www.emeraldinsight.com)• Thomas Magnusson, Glenn Johansson, 2008. Managing internal technology transfer in complex product development. Source: European Journal of Innovation Management Volume: 11 Issue: 3 2008 (retreived on http://www.emeraldinsight.com)• http://www.orange.com/en_EN/group/strategy/• http://www.orange.com/en_EN/innovation/partnerships/strategic_partnerships/• http://www.emeraldinsight.com