Strategic_Case__T-Mobile

4 August 2011 Advanced Marketing 5000 Final Strategic Case: T-Mobile 1. What kind of brand image does T-Mobile want to build through its celebrity-packed promotion efforts' T-Mobile celebrity promotions T-Mobile has used celebrity branding from the beginning of its marketing campaigns in order to develop brand recognition and target various markets. Catherine Zeta-Jones was the first global spokeswoman for T-Mobile International in 2002, bringing together the family of companies under the T-Mobile global brand name and marketing strategy - "Get More with T-Mobile (Catherine Zeta-Jones Signs with T-Mobile). T-Mobile leadership believed the Welsh actress personified " …hard work, dedication, international appeal, intellect, and style … exuding self confidence and reassurance…" (Catherine Zeta-Jones Signs with T-Mobile). In 2006 T-Mobile "decided to drop Ms. Zeta-Jones from its advertising in favor of a more man-on-street approach to marketing" (SHARMA). At the time the company refused to comment on further branding changes among other things. Though not expressly stated, speculation may be that her several million dollar contract was too much after T-Mobile committed more than $4 billion for new radio frequencies (SHARMA). In addition to going after the "Zeta-Jones" demographic, T-Mobile used niche marketing to attract the growing minority markets. In particular, Hispanics and African Americans were favored with T-Mobile choosing Snoop Dogg (T-Mobile USA) to market their re-branded Danger Hiptop known as the T-Mobile Sidekick (Danger Hiptop). Additionally, T-Mobile is attracting minority women. They sponsor, "… the National Basketball Association, the NBA Rookie Challenge and the Women's National Basketball Association" (T-Mobile USA). From these examples we see that T-Mobile wants to attract the self-confident, "getting the most out of life" person across all cultures while also attracting minorities, particularly Hispanics, African Americans and women. However, most recently it seems that T-Mobile is struggling for brand identity. The old slogan, "Get More with T-Mobile" has gone by the way of Zeta-Jones. Various celebrities have been used such as Khloe Kardashian in T-Mobile's 2011 Valentine's day video appeal to the consumer market of generation Y also known as "iGen" (Generation Y). In a similar fashion, Carly Foulkes, a Canadian model "…is the gal working the Anne Hathaway meets Kim Basinger look'" (Tschorn) became the T-Mobile 4G girl in 2010 and is noted for her ads against AT&T similar to Apple's ads against MS-DOS (Carly Foulkes). These ads which seem to have "geek appeal” also seem to be forgetting the niche markets T-Mobile worked so hard to attract. 2. What celebrities should T-Mobile use in its advertisements' Why' The unknown in this question is the impending buyout of T-Mobile by AT&T (Savov). Though T-Mobile continues its attacks on AT&T (and will continue to do so until the buyout is complete), the conjecture is; will T-Mobile spend more money going after niche markets as it has in the past' If the answer is yes, then as in the past it is conceivable that T-Mobile would again desire to gain market share of Hispanic, African American and women sectors of the market. It is becoming a well known fact that the Hispanic sector is quickly becoming the fasted growing sector. "… according to the latest U.S. Census data “The trend for 2050 is that 125 million people in the U.S. will be of Hispanic origin…" (LaBanca). According to LaBanca, advertisers must appeal to the "younger and hipper" crowd and focus on relationship building to develop trust and image. Hispanics have a strong sense of community and they are social animals, says Leslie Pantin, president of Pantin/Beber Silverstein PR in Miami. “They want to build relationships with companies and brands before doing business with them.” (LaBanca). In order to reach this market T-Mobile should align its marketing with young Hispanic icons such as Jessica Alba and boy band Aventura. Jessica Alba is known as an American beauty and ranked No. 1 on “99 Most Desirable Women” (Celebs). Aventura, the boy band from the Bronx is made up of young Latino men who are self-taught and determined (Aventura), "They have been credited by reviewers for being among the first to fuse bachata with R&B, introducing rap into their songs and otherwise making what was once just considered Dominican folk music into the hottest Latin music on the market and being the first Latin act to sell out Madison Square Garden four times over" (Features). Use of these Hispanic icons as a strategic business unit to brand their products would allow T-Mobile to affect this subculture's buying habits and give the perception of reaching out to this community. 3. How would T-Mobile's choice of promotional partners, such as Juicy Couture and the NBA, attract or discourage customers from selecting T-Mobile's phone services' Figure 1 - T-Mobile growth strategy (Managing Editor) The consumer continues to be the main focus of T-Mobile along with providing its 4G network. Partnering with promotional partners such as Juicy Couture and the NBA is one variable of the marketing mix; Promotion, that T-Mobile uses hoping to increase brand loyalty, brand recognition and ultimately consumer buying behavior. What is Juicy Couture demographic' Juicy Couture, purchased by Liz Claiborne Inc., had its beginnings in “… spiced-up maternity wear. 'We realized that no one was doing great, sexy basics'…" (Menkes)." The line is sold in upscale department stores and is marketed as a high-end clothing line at an affordable price, and is aimed at women and girls aged 10–26" (Juicy Couture). This niche market, popularized by the likes of Jennifer Lopez and Madonna may now customize the T-Mobile Sidekick as a product line extension. How do NBA demographics stack up' The NBA player demographics show that 77% of the NBA are African-American (Player Demographic Analysis) and their fan base are African Americans aged 10 - 25 (Inside Hoops). While this approach will likely attract these two niche markets, it may have the unlikely effect of alienating groups outside these demographics unless T-Mobile Girl, Carly Foulkes is able to capture the remaining, broader part of the market. 4. In what ways is T-Mobile supporting its personal selling activities at the retail level' Figure 2 - T-Mobile Retail Store T-Mobile is currently ranked 4th behind Verizon, AT&T, and Sprint. T-Mobile is now poised to capture the data market share, the largest revenue producer for the U.S. market through a strengthened competitiveness approach. Statistics which support this statement are the following: * 4G Network * 200m pop at 21 mbx * Americas' fastest network * 42Mbps in 2011 * Strong smartphone portfolio * Biggest Android line-up * >25 4G devices 2011 * 39% smartphone in contract customer base * +50% of sales * Value leader * Best price unlimited * No 4G Toll * $10 Data entry * <$100 smartphones * Competitive branded distribution * ~ 2,050 company retail stores * Verizon: ~ 2,000 * AT&T: ~ 2,300 * Sprint: ~ 1,100 * Wal-Mart co-brand One of the challenges still plaguing T-Mobile is its churn rate of ~ 2.4%. The company's goal is to get this number under 2% (Obermann). Issues identified are non-payment, handset, price/plan, and network among others. These issues are being addressed with the following solutions: credit management, handset insurance, local coverage, save queue, outbound programs and upgrade reinvention (Obermann). While T-Mobile is addressing several of the threats and trying to turn them into opportunities to grow the company, one area not mentioned is the customer experience at the actual retail store. These stores are typically staffed by younger African American males, 20 - 30 years old. This workforce demographic is often perceived as being more interested in socializing with each other than focusing on customer service. T-Mobile should focus on ensuring their sales force is trained in the art of sales through positive relationship building with the customer. 5. T-Mobile promotes its highly rated customer service as a selling point. Do you think it is effective against competitors that promote high-tech multimedia features' Explain. While T-Mobile touts itself as being a service leader ranked #1 by JD Powers, (until it slipped into #2 behind Verizon) the industry as a whole is known for its over-all poor customer service. These ratings are generated by evaluating satisfaction with their call centers. T-Mobile's philosophy has always been that service plans are too expensive and that many smartphones are over engineered giving the customer more capability than they will use according to CNET's interview with CEO Philip Humm. T-Mobile's concept is to keep the price down and provide customer value. Customer service alone won't be enough to be effective against its other competitors. Verizon, Sprint, and AT&T also claim high customer service. Historically, we know this has been an area that plagues the industry, so T-Mobile's claim of "highly rated customer service" is not likely to be something to make them stand out from the competition. The IPhone with its many features seems to be driving much of the market. AT&T has been a longtime supporter of the IPhone and its capability to interact with the App Store made specifically for the IPhone. Verizon now carries the IPhone4 when previously they were offering Vcast for their answer to download music and other media content. As we can see with the buyout of T-Mobile by AT&T their philosophy wasn't enough. The demanding techno-customer of today desires a phone with multimedia capability, unlimited texting and voice and quality customer service. References Bateman, T.S., & Snell, S.A., (2004). Management: The New Competitive Landscape (6th ed). New York, NY: McGraw-Hill Company. Chauhan, G. (2008) Language in India, Languages Group, Vol 8, Birla Institute of Technology and Science, India. mcdonaldsindia.com Forbes India Magazine (January 14th 2011 issue) Forbes India Magazine (January 28th 2011 issue) Sustar, B. & Sustar. R. (2005). Managing marketing standardization in a global context. Journal of American Academy of Business: Cambridge, 7(1), 302. Retrieved October 10, 2005, from ProQuest database. INTERNET REFERENCES Catherine Zeta-Jones Signs with T-Mobile. (n.d.). T-Mobile website. Retrieved August 1 from http://newsroom.t-mobile.com/articles/t-mobile-spokeswoman-catherine- zeta-jones SHARMA A. (2006, September 26). T-Mobile Readies New Web Phones -- And Hangs Up on a Star Pitchwoman. Retrieved August 2 from The Wall Street Journal website (http://online.wsj.com/public/article/SB115923297434173806- MhwUTXKGBvVjSs_kJoPkTnTXM3Q_20061026.html'mod=tff_main_tff_top T-Mobile USA. (n.d.). Retrieved August 1 from Wikipedia website http://en.wikipedia.org/wiki/T-Mobile_USA#cite_note-45 Danger Hiptop. (n.d.). Retrieved August 2 from Wikipedia website http://en.wikipedia.org/wiki/Danger_Hiptop Generation Y. (n.d.). Retrieved August 2 from Wikipedia website http://en.wikipedia.org/wiki/Generation_Y Tschorn A. (2010, November 16). Los Angeles Times. Retrieved from Los Angeles Times website on 2 August from http://latimesblogs.latimes.com/alltherage/2010/11/who-made-t-mobile-mytouch- 4g-girls-pink-and-white-dress.html Carly Foulkes. (n.d.). Retrieved August 2 from Wikipedia website http://en.wikipedia.org/wiki/T-Mobile_girl Savov V., (2011, March 20). AT&T agrees to buy T-Mobile USA from Deutsche Telekom for $39 billion. Retrieved August 2 from engadget website http://www.engadget.com/2011/03/20/atandt-agrees-to-buy-t-mobile-from- deutsche-telekom/ LaBanca A. (2011, June 6). Marketing to Hispanics takes center stage. Retrieved August 2 from Business Monday website, http://www.miamiherald.com/2011/06/05/2251284/marketing-to-hispanics-takes- center.html Celebs. (n.d.). Jessica Alba Why Is She Famous. Retrieved August 2 from AskMen website http://www.askmen.com/celebs/women/actress_60/61_jessica_alba.html Features. (2010, February 3).15 Young Icons. Retrieved August 2 from Hispanic magazine.com. http://www.hispaniconline.com/HispanicMag/2010_02- 03/Features-Idols.htm Aventura. (n.d.). Retrieved August 2 from Wikipedia website http://en.wikipedia.org/wiki/Aventura Managing Editor, D. (2011, January 20). T-Mobile USA Investor Relations Meeting, In Pictures. Retrieved August 3 from TmoNews website http://www.tmonews.com/2011/01/t-mobile-usa-investor-relations-meeting-in- pictures/ Managing Editor, D (2011, January 25). T-Mobile CEO Philip Humm Talks To CNET, Discusses New Strategy. Retrieved 4 August from http://www.tmonews.com/2011/01/t-mobile-ceo-philip-humm-talks-to-cnet-talks- new-strategy/ Menkes, S. (2003, April 8). Juicy Couture founders have hit the big time. Retrieved 3 August from the New York Times website http://www.nytimes.com/2003/04/08/style/08iht-ljuicy_ed3_.html Juicy Couture. (n.d.). Retrieved August 2 from Wikipedia website http://en.wikipedia.org/wiki/Juicy_Couture (2010, February 20). Player Demographic Analysis - AFL, NBA, NFL, EPL. Retreived August 3 from http://prezi.com/samcuxdkewcl/player-demographic-analysis-afl-nba-nfl-epl/ (2010, April 13). Retrieved 3 August from Inside Hoops.com http://www.insidehoops.com/forum/showthread.php't=170474 Obermann, R. (2011, January 20). T-Mobile USA Investor Day Retrieved 3 August from http://www.download-telekom.de/dt/StaticPage/97/67/90/tmo- invday11.pdf_976790.pdf T-Mobile. (n.d.) Premium retailer program. Retrieved 3 August from T-Mobile website http://www.t-mobilepremium.com/t-mobile-real-estate-support-services.php