mobile PHONE INDUSTRY COMPANY’S MARKETING STRATEGY

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N CELLULAR PHONE INDUSTRY
COMPANY’S MARKETING STRATEGY Keywords - Competition, Porter. M analysis of 5 forces, Marketing strategy, market leader,
market challenger, market follower

I. INTRODUCTION
However it’s been only over 10 years since cellular phone industry has developed in
Mongolia, marketing activities have already been formed and considered as a very
special market. Customer satisfaction level, firm’s effectiveness and to be considered as
a market leader are all dependable on marketing management activities. The bitter the
rivalry is the more demanding the consumers are and their expectations’ level will be
higher. According to that, firms’ customer retaining policy and finding new consumers’
have intensified. Thus, studying about competitor’s activity and strategy theoretically
and using the information about competitors in own company’s activities have become
very important issue to marketers.

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mobile PHONE INDUSTRY COMPANY’S MARKETING STRATEGY

  1. 1. DEVELOPING MONGOLIAN CELLULAR PHONE INDUSTRY COMPANY’S MARKETING STRATEGY USING PORTER ANALYSIS OF FIVE FORCES *GANBAATAR Dayangyalbaa, MBA., **SARUUL-ERDENE Magvanjav, MBA., *Senior lecturer, Marketing and Production professor team, Computer Science and Management School, Mongolian University of Science and Technology, Ulaanbaatar, Mongolia Email: {csms.ganbaatar@yahoo.com} ** Lecturer, Marketing and Production professor team, Computer Science and Management School, Mongolian University of Science and Technology, Ulaanbaatar, Mongolia Email:{saruul52@yahoo.com} Abstract—Thecoryphaeus of competition and competition related theories is Michael Porter’s analysis of 5 forces. In this article, we focused on studying Mongolian cellular phone industry using Porter analysis of 5 forces and developed marketing strategy of “G- Mobile” group of the industry. This job is based on 2000 customers’ survey of 4 cellular phone industry companies, 300 consumers’ survey of G-Mobile group and secondary data. Because it’s unacceptable to include all the surveys and analysis in the article, only the main outcomes are shown. Keywords - Competition, Porter. M analysis of 5 forces, Marketing strategy, market leader, market challenger, market follower I. INTRODUCTION However it’s been only over 10 years since cellular phone industry has developed in Mongolia, marketing activities have already been formed and considered as a very special market. Customer satisfaction level, firm’s effectiveness and to be considered as a market leader are all dependable on marketing management activities. The bitter the rivalry is the more demanding the consumers are and their expectations’ level will be higher. According to that, firms’ customer retaining policy and finding new consumers’ have intensified. Thus, studying about competitor’s activity and strategy theoretically and using the information about competitors in own company’s activities have become very important issue to marketers. II. MARKETING MANAGEMENT CONCEPTS Marketing management concepts have developed via six concepts. Therein: 1. The Production concept 2. The Product-concept 3. The Sales concept 4. The Consumer concept 5. The Social concept 6. The Competition concept A. Michael E. Porter’s Analysis of Five Forces Porter M. considers these 5 factors as a main situation that drives competition and using this method to study industry is very significant in practice. The main importance of this model gives us the chance to define the target market rightly by forecasting the threats
  2. 2. coming from industry competitors, new entrants, substitute producers, suppliers and consumers. Porter M. defines that any firm has 2 methods to attain competitive advantage; by reducing cost and differentiating. These 2 methods should match with certain business characteristics and market segment. Thus we can put together basic 3 strategies. These 3 strategies are to reduce costs, differentiate and focus. III. TELECOMMUNICATION INDUSTRY RESEARCH Cell phone user is a customer who uses mobile technology in telegraph’s public network. Wireless connection user is a user of radio wave communication in a certain network range. Satellite communication user is a customer who uses satellite in communication. Internet users are people with access to the worldwide network. Table 1. Telecommunication industry basic indicator Indicators 2007 2008 2009 2010 Number of telecommunication industry 344 333 333 320 Telecommunication service income (million tugrug) 203326.4 297355.3 309159.3 315027.5 Immovable telephone points (thousand) 149.6 151.6 142.9 143.2 Immovable telephone point rake off 1000 people 57 57 53 52 Television (thousand) 400.1 454 489.5 554.4 Number of cable television users 89689 101332 112921 120551 Number of cell phone users (geminated) 1175.1 1745.9 2208.7 2532.9 Wireless communication number 25123 35404 45490 45461 Satellite communication users 378 417 674 773 Number of internet regular users (thousand) 30 42 106 199.8 Source: Information, post, telecommunication technology department By the fact of July 2011, there are 1,910,017 customers by geminate number and out of that 49 % users are of Mobicomcorporation, 20 % users are of Skytel group, 21 % users are of Unitel group and 10 % are of Gmobile group.
  3. 3. Mobi 48% Unitel 22% Skytel 20% G-Mobile 10% 2011, July Figure 1.Each market share of companies in the cell phone industry A. G-Mobile Group - 88 % of the total customers are prepaid customers and the remaining 12 % are postpaid customers. - For the prepaid service, customers of G10 service take the most percentage. (It’s because the customers of G10 service can make a call for free in their network. So customers tend to choose G10 than G20 and G30 service.) B. Michael Porter Analysis of Five Forces We tried to analyze G-Mobile Corporation’s competition situation and define marketing strategy and the further implementing actions. It’s based on customer survey and secondary data. Only the main results are included because of the fact that all the survey cannot be included entirely. 1) Potential Entrants: In the current market situation, it’s considered that in the industry there are relatively few potential entrants but we emphasize Mongolian telegraph’s company. In a long term, it’s considered as a comfortable industry because it’s impossible to enter new operators. Table 2. Potential entrants’ strengths and weaknesses Potential Entrants Strengths Weaknesses Mongolian telegraph company - Pioneer in immovable telephone - Experienced in the industry - Has good distribution channel - Has good human resources - Weak product line - Management system and decision making are slow - Bad marketing motivation system - Few choices to be made in cell phone - Weak information distribution
  4. 4. 2) Suppliers: Supplier companies play very important role in product quality and choice. G mobile mainly cooperate with the following suppliers. The choices of cell phone supplying are relatively few but have good charging card design. Table 3. Suppliers Product Line Producer Company Country 1 Cell phone and equipment supplier Hisense, Haeir China 2 Charging card Ubiquam Korea 3 RIUM card supplier Oberthur France 3) Buyers, Customers: In order to understand the gross customer’s behavior and change, I took 300 customers’ survey of G-mobile group and the main results are the below mentioned. Therein: 64 % of the customers in the survey said the price is cheap, 23 % said that they chose the company because of its availability in the isolated region and soum are good. Family influence to the purchase is 78%. The weaknesses of the service are the information flow is bad 52%, service waiting is slow 21 % and the 19 % of the customers said that queue is long and slow. Weaknesses are ads and commercials are bad 33 % and 30 % of the customers said that the choices of cell phone and its equipments are insufficient. 45 % of the total survey participants said that they somehow want to change another company. In order to retain customers, the weaknesses should be decreased. Table 4. Customers’ strengths and weaknesses Strengths Weaknesses G- Mobile  Price and tariffs are cheap  National investment  Gota  Technology 3G  Available in isolated region and sou,s  Any phone number choice  Internet service  Few choices in cell phone  Insufficient additional service  Few number of customers  Few information distribution  Few ads and commercials  Few product choices  Network is bad  Bad customer loyalty  Insufficient financial ability  Bad marketing policy  Not well recognized in the industry 4) Potential Substitute Products Table 5. Potential substitute products Potential services Strengths Internet The price level is relatively decreasing Feasibility in messenger and video call
  5. 5. Immovable telephone Because its immovable, there will be no chance like losing or discarding The price is cheap Satellite communications Network system is vast 5) Competitors Table 6.Competitors’s strengths and weaknesses Competitors Strengths Weaknesses MobicomCorporation  Pioneer in cell phone industry  Experienced  Have maximum number of customers in the industry  Vast network system  Financial ability  Many additional services  Multiple branches in the countryside  Vast choices of cell phone  Discount and incentive are low  Insufficient consumer retaining system  Network loading  Price high Skytel LLC  Technological solution  Wave line level  Additional service  Innovator  Cheap price  Customer retaining service  Ads and commercials  Few number of customers  Scope of network is low  Weak marketing policy  Too many customer segmentation  Reputation is low  Choice of cell phone Unitel group  Good promotion system  Choice of cell phone  Strong marketing policy  Price policy  Network loading  Innovator  Increasing number of customers  Discount and incentives are good  Scope is low  Distribution channel  Insufficient additional service  Insufficient customer retaining policy C. Focusing Strategy of G- Mobile Group For G-Mobile group, they will cave in if they move forward the other 3 competitors. Cheap price and differentiating are not that optimal. Because it’s too risky to participate in a very big market, the company should find small and proper market and win the market themselves alone. In other words, finding the market that is not profitable for the competitors but for the G-mobile is suitable. The good example of finding profitable market is American motors. They changed the intended use of military car into civil car
  6. 6. (Hummer). Other companies were not that interested to make this product because it will be too small for big market. So it will be efficient if G-Mobile focus on the product that customers like to use. IV. CONCLUSIONS The more developed the country, the rougher the competition is. Every firm wants to survive, be a leader and wants to increase their profit. However, the professionals in the company should study the theoretical basic knowledge very deeply. It’s not been a long time since the marketing management and marketing strategic management issues have developed in Mongolia. It’s noticed that business organizations are not that capable of doing survey and make decisions in a professional level by themselves. So companies should study their own industry’s competition characteristics and acquire the main theories that will be used for them. Thus they can make more realistic decision on how to predominate on market. REFERENCES [1] Tegshburen. G, “Strategic management of firm” – UB: Munkhiin useg 2003. [2] Shuurav.Ya and Ganbaatar.D, “ Strategic management” – UB: Munkhiin useg – 2002. [3] Nyamzagd.S, “National economic strategic management” – UB: Urlah erdem, 2001 . [4] Lhaashid.D and Badralmaa.R, “Strategic management” – Ulaanbaatar 1996. [5] Statistical bureau 2010. [6] William D.Perreault, Jr.E.Jerome and Mc.Carthy, Basic Marketing: Global Managerial approach 2005. [7] V.Kasturi Rangan, Benson P.Shapiro and Rowland T.Moriaty, Business marketing strategy 1995. [8] Orville C.Walker, James D.Watrins and Harper W.Boyd, Marketing strategy 1995. [9] David W.Cravens and Nigel F.Piercy, Strategic marketing- 8th edition 2006. [10] Boyd Walker and Mullions Larreche, Marketing management-4th edition 1998. [11] Philip Kotler, Swee Hoon Ang, SiewMeng Leong and Chin Jiong, Marketing management- 2nd edition Jan 1999. [12] Cateora Graham, International marketing-12th edition 2005.

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