Product
Range of services t-mobile offer
- Small Range of Mobile Phones
Pay monthly
This service gives consumers a chance to pay per month for the minutes that they use. This type of tariff is generally aimed at people who use their phones on a more regular basis and would be impractical to keep “topping up” as you do with pay as you go. Signing up to a pay monthly contract means you are entering a contract and so cannot cancel until the duration of the contract has finished. These contracts are usually 12 or 18 months in duration so you lose some of the freedom gained in pay as you go. However with a wide range of tariffs overall value is increased and is cheaper per annum. These contracts are aimed at people older than 16 as you are unable to open one if you are under this age.
Pay as you go
This gives freedom as you only pay for what you use. You buy a voucher and use the £10 worth of calls on that voucher. Once that airtime is used you can simply buy another voucher. This is aimed at the U16s who are unable to purchase a contract also for people who do not use their phones frequently. However possible downsides are that unlike contracts you do not get a free phone as you do with nearly all contracts. So an initial outlay is needed.
U Fix
This is a new type of contract introduced buy T-mobile. You are able to manage a price plan around yourself and if you need more you can simply top up. This is still aimed at over 16s. You get all the same benefits as you do in pay monthly however the added luxury of being able to top up your account
Mobile Phones
T-mobiles also offer a small range of mobile phones developed by the company itself. These are an added incentive for people to use and sign up to T-mobile
T-Mobile Product Life Cycle
Sales
Introduction Growth Maturity Saturation Decline
TIME
Introduction
At this stage profit is not a key priority. Product awareness is a main priority and breakthrough prices are employed gradually prices rise to make a profit for the company. Market research may be carried out to help develop the product. Advertisement must be used as product is largely unknown.
Growth
This is the second stage of the product life cycle. Here is where sales are growing at their quickest. Different pricing strategies are used to here than the ones used in the introduction stage. Consumer demand is still high.
Maturity
At this stage sales are at their highest however more importantly the growth of sales is slowing down. At this point different pricing strategies are used to help prolong the product life span. Prices may be reduced to entice new customers to buy the product.
Saturation
When a product enters this stage of the product life cycle its sales are still high but the sales are not rising and they may even be slightly falling. New offers are need to help extend its life span.
Decline
This is the final stage of the product life cycle. The sales of the item are falling and although companies manufacturing these products may have prolonged it life span it is now becoming an obsolete product and the company must assess weather it is cost effective to carry on manufacturing the product.
Prolonging the Product Life Cycle
The sales of a product are highest near the end of the growth and entering the maturity period. Companies use a wide range of methods to help a their product stay in this period for the maximum time possible because profit margins are higher at this stage than at any other Below is some of the methods employed by companies to help a product sell more.
- Price reduction
- Re-launch of product
- Advertising
- Added Value
- Realizing the product to a larger customer base
Mobile Phones
T-mobile offer a wide variety of mobile phones attracting different clientele. These phones have varying features and prices.
The Nokia 6630 is a multimedia phone with 3G technology it contains a very good camera and video camera has all features that consumers today regard as standard such as Bluetooth and expandable memory. It is a part of Nokia “66” series and is aimed at a more business orientated individuals however the price is just £160 on T-Mobile
This phone is the LG3300 with its low price and good looks it’s targeted at customers who can not afford the top range mobile phones. On pay as you go it is currently £70. It features a digital camera and color screen however from its price it is obvious that it is missing some quite pivotal features that the majority of people have come to expect as standard on mobile phones. The absence of a video camera, Bluetooth and with only a basic camera the phone is for people who just need to make calls as well teenager’s senior citizens who need to keep in contact with sons and daughters would be interested in this phone.
This is the T- Mobile mda3. With is high price and stunning array of features this phone is aimed at high end business customers in socio-economic groups one and two. It contains a mega pixel camera offering great pictures and contains a video camera. It sets a new trend for mobile phones by offering satellite navigation however all of these features come at a cost with this phone retailing for £499. This phone is exclusive to T-mobile so people who would like this phone must first sign up to the T-mobile network
The mobile phones T-mobile offers are of a substandard quality to rival networks. Mobile phone networks such as Vodafone or Orange have a much wider array of phones and as mobile phones have become a fashion item the newest mobile phone out by leaders in mobile telecommunications Nokia or Samsung is often not available on the T-mobile network. T-mobile is viewed in the public eye as the budget network however now with reputable companies I.e. O2 and new budget networks offering cheap deal T-mobile need to radically alter their acceptance of new mobile phones.
Price
When entering a new market companies may lower prices temporarily in an attempt to attract new customers to this new brand. Once the business has established itself it will gradually raise prices so it is making a profit. Penetration pricing should only be used for a short amount of time otherwise operating cost will outweigh profit and the business will fold. Only new companies need to use this method not existing companies just bringing out a new product.
When a business sets a price on a product it must look at it costs both fixed and variable and then set a price. If the price on the product is to low and is kept this way for a substantial amount of time, the business in question will eventually fold. By looking carefully at the price and their own cost they can set out a profit margin. A business may charge extra if they feel that consumers are willing to pay this high amount.
This method simply looks at the price being charged by competitors to give a business an indication as to what price it should charge. Before any business begins it would be sensible to see what prices any competitors were charging before the business opened, the new business may well charge slightly less than others, but the price will be based on the competition.
This is employed t0o either try and shift old stock or to attract new customers. When sales are falling companies may try and kick start the buying and set prices this way? Fashion shops often use this to try and sell old stock while still making a profit selling this old stock is necessary to make way for new stock. This happens often in January with shops trying to sell what failed to sell in the Christmas period.
This method of pricing involves setting a price at £9.99 instead of £10. While the actual difference is just a penny it is hoped that consumers will believe that it is dramatically cheaper. Car sales rooms use this method of pricing as do estate agents.
This method of pricing is used when different businesses charge different prices for the same product when selling to different customers. It is common in the transport business where customers can often be charged a wide variety of prices for what seems to be the same product.
An example of this would be on a train, there might be the following customers all paying different fares for the same journey, sitting in the same carriage:
- Children
- Ticket holders booked in advance
- Single ticket holders
- Return ticket holders
- Special day return
- Senior citizens
A business will do this to attract different consumers. Whether a train is full or empty, it costs much the same to run, and so it is important to attract as many different groups of consumers as possible. A train may not be as busy after the morning rush hour, and so prices are lowered for the same journey to attract those people who don’t mind traveling at that time. A similar style of pricing is used on buses.
If consumer demand is high then reputable companies are able to place a high price on he product safe in the knowledge that people will still buy the product. An example of this type of pricing is used when a new games console is released the price is often very high and in the forthcoming months the price gradually gets lowered
To view T-mobiles price structure comprehensively one must first analyze T-mobile price plan with its market rivals
T-mobiles price plans in comparison to a leading competitor
No of Text messages
Firstly we see that there are eight Vodafone price plans in comparison to five. If T-mobiles competitors are offering more services to choose from the likelihood is that consumers will buy from the competitors. T-mobile does offer a “budget” tariff this is £17 and you get 50 cross network minutes and no text messages however for just three pounds more per month Vodafone offer 75 more minutes and 250 extra texts. If a T-mobile customer was to use 75 extra minutes and make 250 extra texts it would cost over £30 extra. T-Mobiles next tariff “relax 100” offers 100 cross network minutes for £21 for a smaller price Vodafone offer 25 more minutes and 250 more text messages. These are large savings and as many teenagers opt for low end contracts and contracts with added text messages (Facts from primary research) it is highly unlikely that anyone people would select T-Mobile over Vodafone based on their price plans alone. The next plan T-Mobile offer is relax 200, this is 200 cross network minutes with no text messages it costs £29. Vodafone offer a similar contract “anytime 200” allows the user to use 200 cross network minutes, it does cost £1 however the contract also allows the user to make 500 text messages which in turn means every text message costs £0.005. Again Vodafone offer a much more of competitive contract than T-Mobile. The next contract T-Mobile offer is “relax 400” yet Vodafone offer two other contracts before the 400 minute mark. These are perhaps aimed at individuals who use their phone more than the average user but still not enough to warrant a higher end contract, offering more choice aids the consumer in making a choice. “Relax 400” this package includes 400 cross network minutes but still no text messages this costs £47, while Vodafone do not have a contract that offers 400 minutes they do have two other contracts “anytime 350” and “anytime 500” “Anytime 350” cost £7 less than “relax 400” it has 50 minutes less than the T-mobile contract however does offer 500 more texts. “Anytime 500” costs £3 more that “relax 400” it offers 100 more minutes and 500 more text messages
Place
Place is really where a company chooses to sell its product if the product is accessible to very few people it will not be successful. You must make your product available to a wide clientele base also when choosing a place to distribute a product a company must take in consideration the social cost and the social benefits-Mobile allows mobile phone retailers to sell their tariffs as well having their own retail outlets. The map shows specific T-mobile outlets in Slough and its surrounding areas however does not include Retail shops such as Phones 4u and The Link these shops also sell T-Mobile products this is convenient for T-Mobile as it means they are able to save money on staff and property as there are companies who will sell their products for them. As more people have access to the internet it is the norm for people to buy online. This is favored by customers as it allows them to make an informed decision without the hassle of perhaps pushy sales assistant and without the need to travel to a mobile phone retailer. T-Mobile offers a wide range of tariffs online that are not available from high street stores this is yet another benefit of buying from the internet. Goods are delivered to your door often free of charge however with a rising number of credit car fraud consumers must be wary and take suitable precautions to prevent this.
The T-Mobile shop in Slough is positioned in the centre of Slough High Street this means more customers are able to access it. The closer the T-Mobile shop is to a CBD of a town the more opportunity to maximize profits because of the amount of people situated in a CBD however competition with other mobile network shops may also increase as they to are situated close to the centre of the CBD.
Promotion
It is important for any company to invest in ample promotion. Without sufficient information consumers are unable to make an informed choice thus leading to them defecting to other companies who have advertised sufficiently. There are many ways a company could advertise their product and a range of different advertisements are able to be used to strike a chord with potential customers. Television advertisements are used by T-Mobile some of these use a football entertainer doing a wide range of tricks this ties in with T-Mobiles ongoing sponsorship of many football teams. Television advertisements are able to offer a clear view of a product however it can only be viewed on a television as opposed to a radio which can be heard in homes and in cars however the radio unlike television does not offer a visual picture.
Billboards offer the best of both worlds with television and radio advertising costing millions for only a few seconds. Billboards can be put up where a high number of people will view them and they can stay there as long as needed
These are some of the billboards used to promote U-Fix. By using humor they are able to target a wider target market. Advertisements in newspapers can also be used
By using advertisements in newspapers T-mobile can target different parts of the market I.e. the Times for a “higher” class.
Coupons can sometimes be offered in connection with a promotion however the goal when using coupons is to maximize the redemption rate. However use of coupons does provide problems. If retailers experience a surge in demand they may not hold sufficient stock causing them to reject coupons.
Competitions and prizes are often employed as a promotional tool these can have many different variations.
Sponsorship
To raise awareness of a certain brand a company may choose to give money to a major event or team, doing this allows a brand to be seen by thousands of people consistently over a steady period of time these contracts are often very lucrative and lead to TV advertisements featuring the event or team being sponsored. In 2003 Vodafone agreed a deal with Manchester United PLC to sponsor them for a period of 10 years the fee paid to Manchester United was £132 million. T-mobile sponsored Euro 2004 and it also sponsors a large number of top premiership sides including Charlton athletic. T-Mobile are also partners in the 2006 FIFA World Cup in Germany continuing the football theme
Primary Research Graphs
Evaluation and recommendations for the future
T-Mobile is a world-wide company so the marketing mix that has been proven successful in one country is not guaranteed to bring the same amount of success in another company. T-Mobile price plans are extremely poor value as proven by the questionnaire and how people highlighted that area of the marketing mix weakest in T-Mobile. The comparison with Vodafone showed that T-Mobiles are not only lacking in quantity (Vodafone had 3 more price plans) but Vodafone’s price plans were also of a much better value than those of T-Mobiles. T-Mobile do however make up some ground on other networks by the contract format “U-fix” the contract where you are given more freedom to alter your bills and price plan but this is still not enough. A key aim T-Mobile must aim to achieve is to offer price plans that are equal if not better to its competitors failure to do this could result to losing more ground to established competitors. In conclusion the price segment of T-Mobiles marketing mix is severely poor and if one part of the marketing mix starts to falter the other parts will soon follow
As T-Mobile is a global company it can offer a world wide service they should do more to promote this fact, this is because when going abroad people need to keep in touch with their friends and families. Developing live TV is also a must if T-Mobile wish to stay ahead of its competitors. 48%of under 18s voted that Live TV was the most interesting feature they would like to see developed. If T-Mobile start attracting customers when they are young the likelihood is that the customer will stay for years. If T-Mobile do indeed develop live TV they should offer packages targeted to the younger generation for example “ £20 sports voucher when you buy ………..” offers like these will attract customers.
T-Mobile need to also start improving the product segment of their marketing mix. The mobile phones that they offer to accompany their price plans are not as extensive as other networks. As new technology comes through T-Mobile must be the first in line to sign exclusive contracts with mobile phone manufactures for the latest and most popular phones. The phones that are exclusive to T-Mobile are often too expensive for “Mr Average” to buy . Investing in the latest models will attract new customers as mobile phones for many people are now being seen as a fashion accessory.
T-Mobiles distribution is strong they have many of their own outlets as well as contracts with “The Link” and “Carphone Warehouse”. This will ensure that as many customers as possible will be able to access their products. Thi part of the marketing mix is fine and at this present stage needs no alteration other than to continue on its present stage.
T-Mobiles promotion strategy may at some point need to come under review, currently they are focusing on football and certainly this is a very good way of T-Mobiles product being on show to thousands of people but they may want to expand into other sports or areas to gain a different type of clientele. Promotion and advertising was voted T-Mobiles strongest part of their marketing mix .
To conclude, T-Mobile have a very good promotion stragey so customers want to buy their products and they also have a good distribution system with a range of shops that a consumer could buy a T-Mobile product with relative ease. From here however it seems to falter T-Mobiles lack of the latest mobile phones let them down also the price plans leave a great deal to be desired, once these two area are corrected T-Mobile should have a winning marketing mix but with the world always changing it is important that T-Mobile keep changing with it because the marketing mix that worked today may well not work tomorrow
