a330med Pds Group Cw (1)

Product Development Strategies

BACHELOR OF ENGINEERING (HONS)

IN

Electrical & Electronics Engineering

A330MED – Product Development Strategies

COURSEWORK II

Students Names: A.V Thushara: 4559762

M.K.K.R Mawella: 4559751

Lecturer : Mr. Chris Kariyawasam

Submitted on : 30/05/2012

Word count excluding appendix - 5245

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Declaration of originality

This report is our work and has not been copied in part or in whole from any other source where

duly acknowledged. As such, all use of previously published work (from books, Journals,

magazines, Internet sources) has been acknowledged within the main report to the list of

references at the end of the assignment report. This report is submitted in partial fulfillment of

requirements of the award of Bachelor of Engineering (Hons) in Electrical & Electronics

Engineering.

Copyright Acknowledgement

The joined copyright of this assignment report belongs to the Auston Institute of Management

Ceylon Ltd., Colombo 03, Sri Lanka, The Coventry University, Coventry, United Kingdom, and

us. (A.V Thushara & M.K.K.R Mawella)

Students Names: Date: 30/05/2012

A.V Thushara ………………………

M.K.K.R Mawella ………………………

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Acknowledgement

First we would like to thank our parents for their guidance and financial support, for the help in

studies and its success. We would specially like to thank Mr. Chris Kariyawasam (BBA (hons),

MBA, MCIM, CPM (Asia Pacific) for his support and guidance to understand the subjects and help

he has given us to complete this write-up. We would like to thank librarian for letting us to

borrow subject related books and magazines, and furthermore our group specially would like to

thank Mr. Malith Lowe for providing us internal marketing data of Sri Lanka Telecom Mobitel

PLC.

This report would not be successful without support of the Institute itself, so we would like to

thank the staff of the Auston Institute of Management Ceylon Ltd. May Tipple Gem Bless you

all!

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Abstract

Since the mobile network industry has been sophisticated with the introduction of high speed

internet services competition has been doubling on a daily basis. Even through Mobitel was the

first to launch 3.5Mb HSPA, internet technology to Sri Lanka in 2002 now the same technology

and similar sort of technology is being used by competitors to offer an equal service to the

customer and new customers are requiring a further speed much sophisticated internet service

as it had become a part of day today life of a typical human being.

During the time when 3.5Mb HSPA internet service was launch for the very first time there

wasn’t a gap between the growth level of internet service and demand level for high speed

internet but according to the most recent researches it has been proven that, there is a gap has

been created due to the high expectation of customer. Consequently the completion has now

stared emerging stronger than ever before which simultaneously creates a new high speed

internet service through which customers can experience browsing internet at a 28.1 Mbps.

Since competitors such as Dialog, Etisalate and Airtel have the capability of making use of this

opportunity it’s better to be reactive rather than being protective after competition exploits the

available opportunity. This opportunity provides Mobitel with an extraordinary market growth as

the need for a speedier internet service has started to bloom now. The existing 3,5Mb HSPA

technology is the principle strength and the tool available for Mobitel to kick off the competition.

Thus the following report looks at the introduction of new 28.1Mb HSPA technology to the

existing internet market through a thorough evaluation of the strategies to used and resources

such as finance, human and other physical resources which would be required to successfully

launch the new service whilst identifying the key factors of barriers which may cause to the

delay or failure of the entire project.

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Table of Content

1.0 Introduction.........................................................................................................................5

1.1 Existing product and service range......................................................................................7

1.1.1 SMART Pre Paid...........................................................................................................7

1.1.2 Post paid........................................................................................................................7

1.1.3 3.5MB HSPA Broadband...............................................................................................7

1.1.4 SMART Pre Paid package............................................................................................8

1.1.5 Post Paid Package........................................................................................................8

1.2 Current market position........................................................................................................8

2.0 Market Overview......................................................................................................................9

2.1 SWOT Analysis....................................................................................................................9

2.2 Key issues and opportunities...............................................................................................9

2.2.1 Issues............................................................................................................................9

2.2.2 Opportunities...............................................................................................................10

2.2.3 Assumptions................................................................................................................10

2.3 Objectives..........................................................................................................................10

2.3.1 Corporate objectives...................................................................................................10

2.3.2 Marketing objectives....................................................................................................11

2.4 Strategies...........................................................................................................................12

2.4.1 Corporate strategies....................................................................................................12

2.4.2 Growth strategy...........................................................................................................13

2.4.3 Segmentation, Targeting and Positioning...................................................................14

2.4.4 Branding......................................................................................................................17

2.5 Marketing Mix.....................................................................................................................20

2.5.1 Product/service............................................................................................................20

2.5.2 Price............................................................................................................................22

2.5.3 Distribution/place.........................................................................................................23

2.5.4 Promotions..................................................................................................................23

2.5.5 Sales Promotions........................................................................................................23

2.5.6 Process........................................................................................................................24

2.5.7 People.........................................................................................................................24

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2.5.8 Physical evidence........................................................................................................24

2.6 Financials...........................................................................................................................24

2.6.1 Expense forecast 2011/2012/2013..............................................................................24

2.6.2 Sales forecast 2011/2012/2013...................................................................................25

2.7 Implementation..................................................................................................................25

2.7.1 Tactical plan for the year 2012-2013...........................................................................26

2.7.2 Promotional plan for the year of 2012.........................................................................27

3.0 Marketing planning process...................................................................................................29

3.1 The role of marketing planning process.............................................................................29

3.2 Importance of undertaking a marketing audit for the successful launch of M4 broad band internet.....................................................................................................................................32

3.3 Utilization of segmentation, targeting and positioning and their importance......................36

3.3.1 Segmentation..............................................................................................................36

3.3.2 Targeting.....................................................................................................................38

3.3.3 Positioning...................................................................................................................39

3.4 Potential issues that may be encountered in implementation of the marketing plan and proposals to address them.......................................................................................................40

4.0 Conclusion.............................................................................................................................42

5.0 List of References..................................................................................................................43

6.0 Appendix................................................................................................................................43

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1.0 Introduction

Mobitel We care always

As one of the leading mobile network providers in Sri Lanka “Mobitel” is the major business

entity in the country which always being innovative with the latest approaches in all aspects.

(Management, Marketing, HRM and in technology) “Mobitel” was initially started as a separate

business unit namely MOBITEL solely governed by single management board with discrete

infrastructure consists of staff, administration, market intelligence communication and quality

assurance. In 2002 Mobitel merge with SRI LANKA TELECOM PLC as a growth strategy as

well as defensive strategy to overcome the issues such as mentioned above the company was

severely suffering from. It has growth in leaps and bounds and is now on par technologically

with the very latest in the Sri Lankan telecommunication industry. AS a result of merge with SRI

LANKA TELECOM PLC Mobitel derived the chance of expanding its business activities better

than the other mobile networks providers in Sri Lanka and now it’s the 2nd largest mobile

network provider in the island and the first to launch 3.5 HAPA technology in South Asia. This

new diversification approach create a different story in mobile market since well sophisticated

technology such as high speed 3.5 Mb GPRS service and video calls which were in operation in

other parts of the world were ultimately launch here in Sri Lanka to give that unique and special

service to mobile subscribers along with a better brand experience.

However the company gives access to over 2 million customers in the country whilst generating

an average turnover of 15 billion per year with an average 30% market share.

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


Principal strategy is focusing on existing marketing and accelerating growth by increasing the

customer base by both capturing new customers and encouraging competitor’s customer

switching. Also innovation is a key factor for the success of where the company is today. New

product / service launch namely 28.1MB HSPA high speed broad band internet service which

has become a need, clearly shows a significant potential in the further, so the next business

strategy is to exploit the opportunity which is identified under the audit, to reach the next year

cooperate objective. By increasing the customer base the company will be increase the ultimate

revenues and profitability.

Mission Statement

“To care, share & deliver”

“These are the 3 key ingredients in our relationship with:

Our shareholder, our employees, our customer committing to these 3 principle as an individual

and as a team and by regularly practicing it as an organization , we truly can car for our

customers and deliver them the best service which will live up to their expectation”.(Mobitel.lk

2012)

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1.1 Existing product and service range

1.1.1 SMART Pre Paid

Talk longer and SAVE with SMART

Subscriber has the privilege of optional features:

SMART Freedom suite of service,

SMART Bonus loyalty discount,

3G Delight

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

1.1.3 3.5MB HSPA Broadband3.5MB HSPA broad band high internet service provision

The customer base

As the national mobile network provider Mobitel caters to all most all, of the customer based

different criteria of segmentation, principally demographic and psychographic factors.

Basically customer segmentation in Mobitel is done as depicted below,

1.1.4 SMART Pre Paid packageTeenagers, young men and women in age groups from 18 to 30, low income profiles such as

labors, frequently users of GPRS,

1.1.5 Post Paid PackageHigh income profiles such as doctors & businessmen & government servants.

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1.2 Current market positionThe current broadband market is highly competitive as every company attempts to offer the

service at the lowest price but since the quality has been a concern for subscribers a market for

speedier internet service is emerging which has been identified under the audit.

Currently Mobitel is one of the high speed broadband internet service providers with the highest

quality and at the lowest rates catering to the mass market. The strength and weakness of the

competitors have been stated in the audit under competitor strength and weakness analysis.

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


2.0 Market OverviewThe telecommunication market especially high speed internet market has been rapidly changing

over the last 3 to 5 years. (lbr.lk 2012) That’s due to the main reason of infrastructure

development taking place which is identified as an opportunity in SWOT. Since business has

started to base upon internet online trading has become one of the major trends in the market

so in order to cater to this market a higher speed internet is required which goes beyond

subscriber’s expectation.

Mobitel as a leading network provider focuses on exploiting the market available with the

capacity if has which has been identified under the SWOT analysis,

2.1 SWOT Analysis

2.2 Key issues and opportunities

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2.2.1 Issues

Resources are not available with the company plus inadequate budgets.

Competition may not exploit the available opportunity.

Customer base is not strong enough to cater.

2.2.2 Opportunities

High speed internet market is still freely available.

But potential is high as internet s likely to become a major need in communication in the

future.

Opportunity to increase company’s profitability, revenue and ultimately market share.

New potential market in northern & eastern provinces.

2.2.3 Assumptions

There will be no changes in government and political environment will remain stable.

Economy will remain growing in next 3 to 5 years with an average inflation and

exchange rates.

Competition may not exploit the high speed internet market in next 12 months.

Communication will be a key issue with the development.

2.3 Objectives

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2.3.1 Corporate objectives

Increasing the share of market by 20% y increasing bottom by 25% by te end of 3rd year 2013.

1st year – by 7%2nd year – by 15%3rd year – by 20%

2.3.2 Marketing objectives Increase sales of broadband service by 25% then end of 2013.

1st year – by 10%2nd year – by 18%3rd year – 25%

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Figure 3 – Potential Mobile Market (TRC 2011)


Increasing customer base by 15%

Increasing profitability by 25% per years

2.4 Strategies

2.4.1 Corporate strategies

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Figure 4 – Mobitel Customer Base (Annual Report 2010)

Figure 5 – Expected Profitability (Annual Report 2010)


The corporate strategies is to differentiate the company in the broad market by using the

business strengths of it and also in order to maintain the competitive advantage the cost will

remain as lowest as possible. Generally when a company focuses on board differentiation the

cost is likely to be high but nevertheless. Mobitel may remain the cost at a lower level as it

already posses the resources required to differentiate its new high speed internet service.

2.4.2 Growth strategy

In order to support the corporate strategies Mobitel basically attempt to exploit the opportunities

from the existing market in which it operates as its relatively less riskier than new market

development and diversification therefore the core strategy is new product/service development

which has been introduced under Ansoffs’ matrix.

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Here at this stage the core intension is to speed up achieving marketing and corporate

objectives by supporting market penetration strategy. New service developments will facilitate

the company including marketing team to reach stated objectives effectively.

2.4.3 Segmentation, Targeting and Positioning

Since the main marketing strategy is new product/service development awareness of the new

service availability should be made in all the segments. The massage Mobitel will need to

communicate would be the best quality internet service at the highest data transfer rate and

more interestingly at the lowest rate which will turn gain the competitive advantage.

Therefore the secondary strategy would be segmentation, targeting and positioning.

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

Segmentation

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Table 3 – Segmentation, Targeting & positioning


The moving number of young people to cities for better carries and high education in becoming

a considerable factor as a result they look for convenience through speed efficiency, ease and

cost. This has been the fastest growing segment lately. The same segment now is switching

from desktop PC to laptop computers which in turn create need for mobile internet accessibility.

Business personalities who are always hectic now have the tendency holding online conference

instead meeting at a physical location and students who finish their school education e\and

mainly the students of universities now move to online education programs which are offered by

foreign countries.

Targeting

Having segmented the entire market based on above elements should then take place to

market the service successfully.

Thus the targeting groups will be as follows,

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Since the corporate strategy is catering to the broad marketing with differentiation, primary

target groups will be all customers who are currently using M3 broadband service. Even though

there are slight differences between target groups based upon attractiveness and strength, each

and every group may look profitable in future therefore focusing n a broad market could be

possible by increasing necessary strength.

Positioning

Mobitel will position its M4 internet service as the primer 28.0Mbps internet service provider in

Sri Lanka as well as in south Asia for the very first time which provides the highest speed on

internet accessibility at the lowest price. Thus M4 will be positioned in subscribers mind as high

quality product at a lower price (Mobitel press release 2012).

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The benefits and unique features of new internet service will be key elements for positioning,

particularly the benefits such as quality, speed, transparency in billing reliability.

Ultimately a statement will be created which will distinguish M$ position from Mobitels’ pervious

M3 service and also from competitors which will as below.

2.4.4 Branding

In order to make new and existing subscribers feel the newness of the new service Mobitel will

exercise a rebranding campaign which firstly changes the logo of previous M3 with the intension

of not creating confusion in customers mind.

New M4 Logo

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As a supportive campaign the marketing mix will be differentiated along with logo, Such as the

packaging of SIM cards, Internet dongles, merchandizing materials and interior of

Mobitel outlets.

In order to make M4 a powerful brand in consumer’s mind, six basic factors created by

De Pelsmecker et al, 2004 will be thereby perceived perception will be more enhanced.

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According to De Pelsmecker et al above model, the six factors will facilitate Mobitel to position

its new M4 broadband service in consumers mind differently from competitors as well its own

service.

The strategies suggested above will ultimately assist Mobitel to bridge the gap of 10% roughly

which exists between revised forecast and objective.

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2.5 Marketing Mix

In order for the company to practice the above strategies a well tuned marketing mix will be

utilized which is comprised of product, price, distribution, promotions, people and customer

service.

2.5.1 Product/service

Broadband as a bundle of benefit

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The principal product is the high bandwidth internet service. Data transfer rate per

second will be 28.1Mb which is absolutely the highest quality.

The main equipment required to connect to internet is the USB dongle which is

manufactured by and supplied by HUAWIE. In order to make the customer feel that it is

not the same product offered by other competitors, it will be offered as an augmented

product by adding a 2 years warranty period and in variety of colours as the customer

pleases.

24 | P a g eA330MEDFigure 10 – Mobitel 4G Dongle


2.5.2 PriceThere will be no direct cost incurred in internet service the only initial cost would be the price of

dongle and the price of pre-paid of post-paid package.

USB dongle will be priced at Rs. 5590 which is considerable lower that the competitors.

Competitor’s prices are stable at Rs. 6800 with one year warranty.

Next cost would be the purchase of package. Either pre-paid or post-paid.

Pre-paid package price Rs 200/=

Post-paid package price Rs 500/=, 800/=, 1100/=, 1400/=

Rates of packages

Pre-paid

2 cent per kilobyte downloaded till 1GB after exceeding 1GB, price will be 1 cent.

Post-paid

2.5.3 Distribution/place

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Frequency availability made island wide including new emerging markets north and

north east with new towers and by creating joint ventures with SLT.

USB dongles will be distributed intensively through all Mobitel arcades and main and sub

dealers.

Pre-paid and post-paid packages will be intensively made available through the existing

supply chain which is comprised of core and sub dealers along with retailers.

2.5.4 Promotions

Primary strategy would be to utilize pull strategies heavily to create awareness, under

ATL mainly TV will be occupied along with Radio. Outdoor advertising, internet and

mobile will be used to support TV and radio advertising.

Secondary push strategy would be utilized to stimulate new and existing subscribers to

buy and keep subscribers informed about upgrades, under BLT mainly co-operate

literature and branding will be occupied along with heavy sales promotions.

2.5.5 Sales Promotions

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2.5.6 Process

24/7 customer service provided through automated customer relationship

management system.

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

2.5.7 People

Customer care unit agents will be trained to be knowledgeable in new service issues to

provide customer with assistance.

Regional outlet employees will be made knowledgeable to handle and solve the

customer problems.

2.5.8 Physical evidence

All Mobitel outlets will carry new M4 logo outside below the main hoarding Mobitel.

Mobitel will be utilized as the umbrella brand for M4thus it allows people to identify the

core brand.

Vehicles will be used for M4 plan will carry the new logo.

Staff members involved in M4 service will carry the new M4 logo on their attire.

2.6 Financials

This is financial justification of the marketing plan this will offer the financial over view of

Mobitel relating to new marketing activities.

2.6.1 Expense forecast 2011/2012/2013

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2.6.2 Sales forecast 2011/2012/2013

According to the variance analysis first year operations will be able to meet the break even with

a 0.5 billon favorable variance which is close to the break even due to the initial investment in

infrastructure, but from the 2nd year company will be able to exceed the break even by 1.8 billion

and in the 3rd year it’s been forecast to be 3.18 billon.

2.7 Implementation

The following milestones plan will indicate the key marketing activities which need to be

completed on time.

2.7.1 Tactical plan for the year 2012-2013

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Heading

2011 2012 2013 Infrastructure development

for internet

900 Million -‐ -‐

Maintenance & upgrading 150 Million 215 Million 125 Million Sales and Distribution Staff wages, incentives, salaries, travelling, fuel

50 Million 35Million 25Million

Media – Above the line 400 million 300 Million 200 Million Media – Below the line & Merchandizing and s

ales promotion

250 Million 150 Million 50 Million

Total expenditure 1.750 Billion 700 Million 400 Million

Heading 2011 2012 2013M3 HSPA Service 2 billon 2.5 billon 3.5 billon


2.7.2 Promotional plan for the year of 2012

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The tactical plan and promotional plans will be implemented by using the existing 3 marketing

functions namely pre-paid, post-paid and M4 along with newly recruited personal who are

specialized in IT and engineering. There will be no changes in the positions of brand or

marketing managers thus control and monitoring of distribution and marketing activities will be

taken care by regional and territory managers with the support of top level management.

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3.0 Marketing planning process

Marketing is based on the concept that an organization should identify the consumers’ needs

and wants and then provide products or services accordingly to a satisfactory level. Failure to

understand could result in a disaster for the organization. Marketing is a relevant discipline for

all organizations, regardless of the business. (Kotler 2007)

The importance of segmentation, targeting and positioning strategies would be evaluated for the

successful implementation of the revised marketing plan of 28.1MB HSPA whilst being aware of

the barriers that may be deter the marketing planning and implementation process. Ultimately

the required tools to mitigate the barriers would be evaluated for success.

3.1 The role of marketing planning process

Marketing planning is process which is comprised of several stages which may vary from

company to company depending upon the objectives and capabilities. Mobitel usually follows

the basic steps on a marketing depicted below.

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The above structure is key advantages for the successful implementation of the marketing plan

which was formed on a conceptual basis.

The defined marketing planning process enables Mobitel to better manage day to day business

activities through the criteria depicted below.

Defines the market

Marketing planning process firstly obtains information regarding to industry and

market which is comprised of competitors, customers, trends and growing

markets as well as changes in both external and internal environment.

Information obtained would then enable Mobitel to indentify key strengths, which

can be exerted to exploit the opportunities created by gaps.

This definition helps Mobitel to be clear of the following criteria.

Where the Mobitel is now?

Where the Mobitel wants to be in the future?

How does the Mobitel get there?

And how does the Mobitel ensures its arrival?

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The clear understanding of above elements would ultimately tempt Mobitel to come up with new

SMART objectives and strategies so as to exploit the opportunities emerged. In order for the

company to successfully make it, marketing planning process is used since plays the following

significant roles in addition to the above role.

Sets up the direction and the focus of the organization.

The marketing planning incorporates both mission and vision of the company and

present and future directions of Mobitel. Having set them only the stated objectives and

strategies will be focused with the intension of coming up with a well tuned tactical plan.

Tool to communicate the purposes and the future needs of the organization

Mobitel is responsible to convey its new changes namely the launch of M4 broadband

service to relevant stakeholders whilst the organization clearly shows its ethical and

cultural consideration. This produces the background to objectives of the company in a

socially acceptable manner.

Acts as operational framework

Frame sets out plans for each aspect of the strategies to be used when achieving the

stated objectives whilst outlining the strategies. Also identifies required resources such

as time, budgets, physical resources, human resource etc for the successful

implementation of plan.

Helps to allocate budget and resources

Cost of each stage of the plan will be monitored for the effective allocation of budgets

which helps to reach objectives with no exceeding budgets and resources will be

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managed in order to omit delays and inefficiencies which may emerge though out the

plan implementation.

A mechanism to measure performance

Monitoring and controlling tools of marketing plan helps to measure the performance of

M4 plan throughout the entire implementation. This is useful to evaluate overall

performance and identify areas where what went wrong and what really caused the

unlimited effect.

According to McDonalds 2007 the overall purpose of marketing and its principal focus is

the identification and the creation of a competitive advantage. As it’s defined by

McDonald, Mobitel had the same need of marketing planning for a variety reason such as

follows,

The speed of technological alterations

As a technology oriented company Mobitel always watchful of alterations made today’s

technology since technology has been the key fact their competitive advantage.

Marketing planning process facilitated Mobitel to identify alteration has been occurring

over the last few years in Sri Lanka telecommunication industry.

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

competitive advantages.

Having identified the changes in technology then leads the company to develop a competitive

advantage which will grow the business in return. Researches carried out to identity the

changes happening in the market helped to come up with a break through idea of new service

establishment.

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3.2 Importance of undertaking a marketing audit for the successful launch of M4 broad band internet

Marketing audit is a comprehensive, systematic, independent and periodic examination of a

company’s, marketing environment, objective, strategies and activities with a view to

determining problem areas and opportunities and recommending a plan of action to improve the

company’s performance. (Kotler & Armstrong 2005)

The main 3 purpose carrying out an audit is to,

Identify the organization current market position.

Understand the environment opportunities and trends

Clarify the organization ability to cope with environmental demands

(Wilson & Gillgon 2005)

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The audit facilitated Mobitel to identify where the company is at present and this is the

basis upon which it can decide where it desire to head in the future. The audit which was

carried out for the implementation of M4 is as below,

The above systematic process enabled Mobitel to obtain a huge amount of information relevant

to the specific business need. In order to successfully launch M4 internet service a thorough

understanding of the external and internal environments were required and that was fulfilled

successfully.

Since the market is dynamic tools such as PESTEL, porters’ five forces and SWOT were

used to identify the key issues and opportunities that could be exploited.

Very firstly Mobitel need to analyze the most influential factors in the external

environment over which the company has no control. The audit of the macro

environment was done under PESTEL frame work,

The study of the macro environment facilitated the company to identify the most influencing

factors which may affect the M4 launch. Especially the political exercises relevant to

telecommunication were very essential as a failure to adopt the internal process in accordance

with the external factors might result in a severe financial lose as well as reputation lose.

Information obtained from both Macro and Micro environment enabled the Mobitel to

identify the market trends, market gaps and opportunities as well as the growth and the

profitability of the market.

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Micro audit obtained information relevant to the industry, customers, competitors and

suppliers which in turn helped Mobitel to come up with smart objective and great

strategies to the successful launch of M4.

Information may be utilized throughout the entire planning and implementation of the M4

plan. Basically the analysis was done focusing on men, money, materials, machinery

and minutes. The adequacy of resource formed the foundation for the commencement of

the plan also to better manage internal teams engaged in the plan.

Also audit was useful to form a clear picture of the effeteness of the product and service

portfolio of the company which defined how well each product in the market.

Strategic audit was able to identify the necessary strategy for the successful

implementation of the M4 plan whilst fine tuning the marketing mix.

Thus it’s evident that the audit is must for the successful implementation of the

marketing plan because of the following key advantages,

Frequent audit gives strength to planning process and indirectly it enables Mobitel to

stay ahead of the competition.

As the marketing environment is rapidly changing Mobitel needs to have structure in

place in advance so an audit gives the way for a company to build up the necessary

structure.

It creates the opportunity to identify the problems at an early opportunity before affecting

the entire business process of the company.

Even though there are several advantages in carrying out an audit there were certain

unfavorable issues faced by Mobitel research and development groups. Those factors have

potential of deterring the audit process and destructing the entire marketing planning process.

Those factors are depicted below,

Time was one of the key issues face in term of gathering information.

(When obtaining information in northern and eastern markets R&D group had to stay

therefore nearly 2 weeks)

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The increasing speed and turbulence of the business environment results in

timeliness.

(By the time the audit gets complicated the information gathered might be out dated and

re obtaining information will take time and cost)

A significant cost had to be incurred.

(The expenses of R&D groups, transportation, accommodation cost etc had to incur

during the period)

Inter-departmental coordination difficulties.

Finance department was reluctant to allocate budgets for audit as it was quite high

therefore a problem was raised between marketing and finance

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

3.3 Utilization of segmentation, targeting and positioning and their importance

Before the most appropriate strategy is developed its necessary to determine both cooperate

objectives and the corporate objectives of the company. Thus having identified the below criteria

only the marketing strategy would be developed.

Mission and the vision of the company and the corporate strategies.

Opportunities and capabilities of Mobitel.

Marco and Micro environment should be scanned for information regarding to customer

and competitors.

According to the strategies report the corporate strategy is to differentiate the company in a

broad marker context by practicing new product development as it’s a less risky strategy

relatively to market development and diversification. In order to best support the strategic

approach segmentation, targeting and positioning strategy as depicted below.

3.3.1 Segmentation

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Segmentation is the process of dividing a total market on some criteria into several groups

consisting of homogenous customer so as to enable the marker to approach each segment with

specially designed marketing mix.

As the definition implies this process helps Mobitel to lunch new M4 service with the advantages

which ease stepping into targeting approach.

Segmentation could be done on a demographical basis which comprises factors such as

age, income, profession, education.

Mobitel basically segments the entire market based on age, income, profession and

education as these segments are showing a signification growth and a high potential for

high speed internet which ultimately results in high profitability.

Segmentation is also done on the basis of Geographic’s which is primarily done within a

country, provincially and state wise or with a foreign market.

Since the core strategy is catering to existing market with a new product, the entire

island will be considered as a segment.

Segmentation for M4 will also be done on the basis or usage of pattern

Consumers are classified as heavy users and light users as well as brand loyal users

and switchers who enable the company to fine tune the marketing mix in terms of

catering to each area.

Psychographic and life style are also another major segment basis which enables the

marketing team to better understand the interests, activities, attitudes and behaviors of

customer through psychographics.

Segmentation gives a clear understanding of the difference that exist between

customers groups to which Mobitel caters and hoping to cater which help the company

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to first target particular segments and fine tune marketing mix so as to satisfy each

segment perfectly

It also exposes the gaps in the market. It shows groups that are not being satisfied with

the available products and even the groups which are looking for something new.

Segmentation facilitates to retain the customer by catering beyond the expectation with

specialism since it’s very costly to recruit new customer that retaining existing customer

this really helps company to market it service as it focuses on the existing market.

Ultimately segmentation assists the marketing team to estimate sales and profitability by

analyzing each segment separately.

Thus the new M4 broadband service can be successfully implemented as its well justify by the

segmentation process which makes the investment secure.

3.3.2 Targeting

Having segmented the marketing the next step is to decide which of these segments the

company wishes to focus on for its marketing purposes. The selection of segments and

targeting would be done based upon dimensions identified by Kotler

Measurable

Accessible

Sizable

Profitable

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

Concentrated marketing

Differentiated marketing

Undifferentiated marketing

Niche marketing

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Since Mobitel expects to cater to more than one segment differently Differentiated marketing

approach will be used.

Laptop and PC users will be target based on their profession and income. Elements of

the marketing mix such as prices and promotions will vary from other marketing mic

targeted at following groups.

University students will be a primary target as distance learning programs and online

programs being developed. The prices and promotional mix varies catering to these

targets.

Private sector and government sector employees will be targeted as its vary much

easier as most of the government servants use Mobitel per-paid packages.

Thus all segments stated in strategic report will be targeted as all require the benefits of

convenience through speed and quality.

3.3.3 Positioning

According to Kotler et al 1999

A product positioning is the way the product is defined by consumers on important attributes the

place the product occupies in consumers mind relative to competing products.

The main purpose of positioning is achieving a competitive advantage over the company’s rivals

which can be perceived by the customer and successful positioning can be done by balancing

the needs of the customers with the available resources.

In terms of positioning there are several factors which can grow the brand in consumers’

mindset.

Credence

Attributes such as speed convenience and reliability used to create a position is the market thus

the product is placed in target groups minds as a distinctive product.

Consistency

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The attributes offered such as quality, speed, convenience and reliability will be consistence

through the marketing mix used for each target group.

Competitiveness

The product must offer benefits that are not offered by any other competitors in the market thus

the product is placed in target groups minds as a distinctive product.

Clarity

Clear positioning is an issue which means the product has to act as it says Mobitel will position

its new internet service in mindset of customer as the premier 28.1Mbps internet service

provider in Sri Lanka as well as in south Asia which provides the highest speed and the highest

reach at the lowest price.

3.4 Potential issues that may be encountered in implementation of the marketing plan and proposals to address them

The most difficult part is implementation of the plan. It’s easy to do planning of strategies

relatively to implementation. Therefore there are 3 key areas that are essential for Mobitel for

implementation of M4 marketing plan.

Communicating the marketing plan across the organization

Specifying the required resources, finance personal and time

Changes to the organizational structure and culture.

There are several issues that may be encountered during the implementation of the M4 plan

which in turn may course destruction.

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4.0 Conclusion

As the above write-up implies in order for Mobitel to successfully launch its new services to the

existing market its vitally necessary to have gone through a well established marketing planning

process which crates clear picture of market situation and the exact cause of actions which may

be used to successfully execute the marketing plan. But in order to have established a better

plan a successful audit is necessary because that’s what exhibits the available gaps which may

be made us. With a well established strategy like STP Mobitel may gain an extra advantage to

be more successful in new service launch because strategies will indicate more opportunities

while preceding through the plan to have it done better way also it will create a futher

sophisticated competitive advantage to the company. Being aware of barriers will be vety

substantial as they could deter the process of marketing plan. Therefore in order for Mobitel to

successfully implement the marketing plan solutions will be needed to overcome the barriers

which will lead the company to the highest competitive level.

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5.0 List of References

Lanka Business Report (2011) Sri Lanka telephones overtake population: Central Bank [online] available from <http://www.lbr.lk/fullstory.php?nid=201105251731037359> [25 April 2012].

Telecommunications Regulatory Commission of Sri Lanka (2011) Statistical Overview [online] available from <http://www.trc.gov.lk/information/statistics.html> [25 April 2012].

Annual Report (2009) Sri Lanka Telecom PLC. (page 55)

Inforsrilanka.net (2011) Mobitel 4G Lite [online] available from <http://www.trc.gov.lk/information/statistics.html> [25 April 2012]

Pelsmacker, De P. (2004) Marketing communications. London: Pearson Education.

Kotler, P. & Armstrong, G. (2008) Principles of Marketing. New Jersey: Prentice-Hall Inc.

Phil, M. & Graham, H. (2009) The Marketing Planning Process. London: Elsevier.

Kotler, P. & Keller, K. (2011) Marketing Management. New Jersey: Prentice-Hall Inc.

Ulrich, T. & Eppinger, D. (2012) Product Design and Development. New Delhi: Tata McGraw-Hill Ltd.

Information and Communication Technology Agency (ICTA) (2010) Sri Lanka Mobile Market [online] available from <http://www.icta.lk/en/e-sri-lanka.html> [11 May 2012]

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http://www.icta.lk/en/e-sri-lanka.html

http://www.trc.gov.lk/information/statistics.html

http://www.trc.gov.lk/information/statistics.html

http://www.lbr.lk/fullstory.php?nid=201105251731037359


6.0 Appendix

6.1 Marketing environment audit

Political

Since the war is over development plan in Northern and Eastern is taking place.

Particularly the development of infrastructure including schools, education

institute, healthcare. As the infrastructure being developed the communication will

become a major need which in turn may create a significant potential for high speed

internet in next decade.

Tax levied on imported electronic goods have been reduced by the current government

by removing the surcharge consequently the cost of the imports have started to

decline thus the prices of mobiles, mobile accessories internet equipment such as

modems, routers and broadband USB dongles.

Equipment used for the purpose of communication required to obtain the license form

TRC Telecommunication Regulatory commission. This has limited the opportunities

available to unauthorized importers to import mobile and internet accessories.

WTO has been influencing the local government to further reduce the tax especially on

imports thus it has been forecast that there will be more benefits through advantages of

prices of imports.

Economical

Inflation had been reduced to a single digit 3.4% from 22.5% in 2008. Decline of

inflation now has drowned the attraction of investors especially in hotel industry

which may create a huge market in tourism. Thus quality and effective

communication will be one of the principle requirements in the very near future.

Bank interest rates for fixed deposits have been reduced to an average of 10% form

24% as a result now people are keen on investing money in different sources rather

than in FDs.

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Share market is reported to be one of the best share markets globally. As a result

now ordinary people who have money to invest tent to start investing in stock

exchange and trade online. Therefore the demand for high speed internet has

become a significant demand especially in suburban areas.

Unemployment rate has been declining over 3 years from 8% to 5.9%. Since the

employment is increasing new career opportunities are made so the

communication has become q major need for efficiency.

Literacy rate has grown up from 90% 91.6% by the end of 2009 which is evidently

shows that local education system is being developed particularly private

universities, private study centers, local universities are also becoming technological

oriented plus government schools and international school.

Social and cultural

Propensity towards convenience through efficiency particularly in private business

sector in terms of online conference and video calls which will increase the demand

for high speed internet since employment increase

High tendency of people towards innovation which in turn creates job opportunities

for people who live outskirt of Colombo. Jobs bases on internet.

Quality is becoming a major concern for people rather than the price thus the society is

very much concern about the quality.

Society has now started to increase the use of internet form 2003 to 2008 from 1.5% to

5.77%

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Technological

Telecommunication industry is thriving tremendously particularly the mobile

communication

Several technological programs are taking place to make the society technology oriented

such as “vidatha” (transfer of technology) program, alternative energy programs and

other development program like “ gamma irradiator”

ICTA( information and communication technology agency) preparing itself to contact

practical training programs for Sri Lanka media personal on internet which will definitely

require the speed internet.

The usage of technology in education increase in Northern and Eastern provinces

especially for distance learning programs.

“kotmale” community internet radio project attempts to enhances the benefits of

information and technology in remote areas thus there will be a high potential for high

speed internet in next 5 years.

Legal

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Ministry of technology and research has been restructured to enhance the technological

strength in the region through new policy formulation and implementation.

ICTA establishes an E-laws project to strengthen legal environment for the development

of information and communication in Sri Lanka through laws by the parliament.

Standards of all equipment used for communication required to be approved by TRC.

Micro environment

Market potential – the internet market in Sri Lanka has already been occupied by several

telecommunication companies with both dial up and ADSL, but nevertheless existing internet

service which used to be an expected service now becoming basic service since the speed of

data transfer is insufficient therefore there is high potential for higher speed internet service but

the risky factor would be the market is consisted of network providers who may have the

capabilities of exploiting the opportunity.

Current market –internet usage and population statistic:

Note: per capita GDP in Us dollars

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

Market trends- The fastest growing segment is the in today market in the young crowd who are

both carrier conscious and studying oriented. With the increase of this segment the number of

lap-top computers users in increasing while creating a need of mobile internet accessibility.

Students in other hand tent to start their higher education programs at high schools which need

a speedier internet service for examinations and other studying activities. Thus convenience,

speed and cost have become the most common trends and need in the internet market.

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Market growth

According to the above spastics the number of subscriptions has gone up to nearly 250,000 by

the mid of 2009.The lunch of new services made by other competitions such as Sri Lanka

Telecom, Dialog GSM, Airtel, Hutch and ETISALATE has been the most important single

reason for this growth next to the demand of customers but the gap between the demand

increase and growth of high speed internet service over the last 5 years has shown potential for

anyone who is capable of launching new high speed technology to fill the gap.

Customer/Target Market - Mobitel as the national Mobitel network provider caters all most all

of the customers based a verity of segmental elements thus marketing new service will be

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create less hassles since the customer base is already formed which comprises ,Teenage,

University students, Government servant, Private sector employees, High profile businessmen.

The customer base of Mobitel has been designed by verity of segmental elements like

Age-teenage, university student

Occupation-government servant, private sector, top business sector

Psychographic-life style, business, conveniences

Usage-frequent user

Competition - Mainly there are 6 telecommunication companies who the capability of providing

internet service. Since speed is the main element in internet services all competitors try to

posses the highest speed of data transfer to gain more of the market share.

There is a heavy competition particularly between mobile network providers who have the

capability of providing up to 7MB data transfer rate per second and that have been the main

reason to looking for a speedier service supply.

Competition based on strength and weaknesses

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According to competitor strength and weakness analysis it’s evident that almost 4 companies

are capable of exploiting the opportunity available for 28.1 MB service launch. Since Mobitel

Stands as 2nd strongest entity its feasible to make use of the opportunity prior to any one of

other.

Suppliers - There used to be only one supplier of internet related equipment namely “GOTEL”

but since the usage and the demand of internet is thriving new suppliers have started entering

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the market. The strongest current suppliers of internet and mobile equipment are HUWAI and

COMTRONICS Lanka PVT Ltd.

Distribution and dealers - Distribution of network is made through own tower and SLT towers.

Engineering task and other technical issues has been outsourced to SIERRA. Distribution of pre

paid and post paid packages made through a channel which comprises communication shop,

phone shops, main and sub dealers. And 7MB HSPA USB intranet dongle is distributed through

Mobile arcades, phone shops and computer shops.

6.2 Internal Audit

Marketing Strategy audit

Marketing Objective - Marketing objective for the previous financial year was to increase sales

in POST Paid packages by penetrating the market. The current objective is to maximize sales of

both pre paid and post paid regularly and also as an special internet package.

Strategy - The core strategy is NPD (new product/service development) as the corporate

objective is catering to existing market with new and the latest products and services thus the

growth has been obtained mainly by catering to the existing market with new product and

services. As the supporting strategy STP is being exerted heavily along with cost advantage.

Company caters to each segment with a different tuned marketing mix at the most effective

cost.

Marketing organization audit - Even though there are no marketing directors there is a chief

marketing manager who is responsible to all marketing decisions. Marketing department is

comprised of 3 main functions namely Product team-POST PAID, Product team-PRE PAID

Product team-M# (Broadband).All product team are accountable to retail sales manager and

cooperate sales manager. The decision taken in marketing department should be transparent to

CEO and depending on the risk involved the decision required to be communicated to the chair

person.

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Marketing system - Information relevant to marketing, obtained through the data base which is

functioned by an ERP system which is again functioned by CRM (Customer relationship

management) system KM (Knowledge management) system, SCM (Supply Chain

Management) System. KMS obtains information mainly from external sources automatically

and interprets to ease decision making process. CRM obtain information relevant to subscriber

and facilitate to make decision relevant to future needs.

Marketing control System - this allow the management team to evaluate the success tare of

the product and services range through the analysis of budget.

New product Development - Since mobile is into service marketing, physical product are not of

the product and services range through the analysis of budgets.

New product development – Since Mobile is into service marketing, physical product are not

development by the company itself.SIM, pre paid voucher and accessories are bought from

suppliers on contractual basis. Thus there is no NPD process in place except for network quality

development

Marketing productive Audit-Productive of each marketing function is measured according to the

objective achievement and profile made. Staff productive measured through the performance of

teams, individuals and target achievements. Productivity of budget measured through budget

variance analysis.

Marketing Function Audit

Product - There are 3 products namely SMART pre paid, post paid and M3 (broadband) broad

band has become the 2nd highest next SLT.

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Price - The Company utilizes the product differenced pricing as there are 3 various products so

there are variation in the prices of each product and services.

Place - Distribution of network is already done through both SLT and MOBITEL own towers and

the SIM packages, pre paid vouchers and internet USB dongles are distributed through a

channel system.

Promotion - Both ATL AND BTL tool are being used for promotions. Particularly TV and Radio

advertising, internet, sales promotions, merchandizing, and sponsorship (Sri Lanka cricket

team)

People - There are 3 main teams for each product and service. People have been trained and

made familiar with the products and other relevant elements. Uniform is a must especially for

field teams and office people.

Physical evidence - M3 logs is used along with MOBITEL official trade mark and interior and

exterior of Mobile regional showroom are designed as pre the standards made by head

office .Sub dealers and main dealers are decorated with boards and stickers.

Process - The ERP system is a place to manage information, customers and suppliers to

increase the efficiency to the best level.

6.3 Contribution of Group Members

The group members are,

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M.K.K.R. Mawella

A.V. Thushara

We received our Courses Works on 31/03/2012 and we met as a group to discuss about the

course work on 2nd of April 2012. We divide the tasks and gave the tasks to each group member

to do within this given time period.

M.K.K.R Mawella

Introduction

Problem statement describe

Product planning

Typing & Designing of the Assignment

A.V Thushara

Concept generation

Product specification

Product life cycle

SWOT/PEST

Marketing & Financial implications

Conclusion

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Task Name Duration start

Problem Statement Describe 3 2/04/2012

Product Planning 5 7/04/2012

Product Specification 3 11/04/2012

Concept Generation 5 15/04/2012

Product Life Cycle 3 18/04/2012

SOWT/PEST 6 24/04/2012

Marketing & Financial implications 2 26/04/2012

Conclusion 1 27/04/2012

a330med Pds Group Cw (1)

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