The smartphone market is
about to explode in the near
future. Right now several
companies are established to
benefit from the intensive
market growth. You and your
team have been appointed as
the top management for one
of these companies. The
products combine all, or
several of the following nits;
cell phone, camera, PC, GPS,
media player and various
other useful features in a
compact mobile handheld
unit.
Your responsibility covers the
marketing operations. A
sister company is responsible
for the production. However,
as the marketing decisions,
such as decisions about the
product features, drive the
production and production
costs, the production company
invoices your company
for the appropriate costs.
Your company manages the
European and Asian markets.
The demand in Europe is at a
promising level already.
Moreover, the yearly growth
will be quite substantial. At
the moment the demand in
Asia is clearly lagging behind
European, but on the other
hand, the demand growth in
Asia is estimated to be
extremely high.
SEGMENTS
Both the Asian and European markets can be divided into
four segments: two corporate segments and two consumer
segments. Both customer groups; consumers and companies
can be further divided into high-end and low-end
customers. Although the names of the segments are the
same for the both areas, their preferences across the markets
are clearly different.
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The preferences of the Asian segments differ more from
each other than the preferences of the European segments.
For example, the price sensitivity of the Asian
low-end consumer segment should be clearly more than
that of the European one – or any other segment for that
matter. The price is not much of a factor in the high-end
corporate segment’s choices – especially in Asia.
Extra features are important in high-end segments. The
preferences for features are segment dependent and
should be analyzed by the management. Again, in Asia the
difference between the high-end and low-end segments’
preferences is remarkable.
Sport design is rather famous in the consumer market.
Low-end segments quite often go for classic design.
Avantgarde is often high-end customers’ choice. The
differences in the design choices are moderate across the
segments, however. If all the others are offering a certain
well selling design to a segment, a more individual
design that deviates from the others can manage quite
well.
FEATURES AND DESIGN CHOICES
MARKETING COMMUNICATIONS
simbrand
The preferences of the Asian segments differ
more from each other than the preferences of
the European segments. For example, the price
sensitivity of the Asian low-end consumer segment
should be clearly more than that of the
European one – or any other segment for that
matter. The price is not much of a factor in the
high-end corporate segment’s choices – especially
in Asia.
Channel investments consist of personal selling
efforts to the channels and everything that
strengthens the product’s position in the channel.
These measures could be e.g. providing the
channel stores with in-store advertising materials
and arranging sales competitions for the
channel’s personnel with nice prizes for the
best selling salespeople for the product in
question.
The channel investments should be quite similar
in their efficiency across the different channels,
department stores, home appliance stores and
specialty stores. The market shares of these channels
often differ between the different segments.
For example, specialty stores are often preferred
by business customers
R&D INVESTMENTS
simbrand
R&D is an important factor for success in the
industry. The knowledge generated by R&D
helps to decrease the production costs. Moreover,
it enables the launch of new, better products.
R&D has a long-term effect. The technical
competence levels in compactness and battery
life are based on the R&D investments made in
previous years. The higher than necessary costs
due to low competence levels decrease the
margins of the products and thus leads to poor
profitability. The enhancements in competitiveness
take time, since investment in R&D this
year will be realized in the cost and profit for the
next year and beyond.
Larger screens, wireless connections, improved
media playback, mobile games and all the other
functions demand more and more power, keeping
battery life a critical feature for the years to
come. Battery life depends on the power
efficiency of the device. The improvements in
battery technology and software solutions that
disable unnecessary processes in the device
when they are not needed can be applied to
lengthen the battery life.
Compactness of the device is an important
factor. If the devices were too bulky, the highend
market would favor a combination of portable
computers and mobile phones. Asian
markets react to compactness of products
seemingly more than Europeans. And in both
markets, high-end segments favor compact
products more than the low-end segments.
Generally, high-end segments are more
demanding when it comes to compactness.
Battery life is the most valued feature for companies
and does not seem to be as important a
feature to households in either of the markets.
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