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Executive summery
Omantel is a leading telecommunication company in Oman. The recent trend in the
telecommunication sector induces the Omantel to investigate the feasibility of diversification
strategy. Thus firm intended to diversify its operation in to entertainment sector via
launching a brand Omantel TV. This brand will satisfy the entertainment needs of the
residence of Oman while protecting and promoting the cultural value of Oman. Omantel's
philosophy in dealing with there customers is that they always listen to them to know and feel
their views and ideas, and seek full transparency to meet there promises to achieve all their
aspirations and needs.
After the merge between omantel and omanmobile and in her new dress, omantel remaining
providing her different customers with full wide range of integrated communications
solutions. Because Omantel is one of tributaries companies of the national economy it keeps
playing very important role in the national economy since 1970.
Entertainment industry in Oman is highly competitive and regulated by the government.
Taking this challenge Omantel TV indented to archive its marketing objectives of becoming
the market leader in five year time while providing satisfactory return to the share holders.
This paper elaborates the marketing plan of Omantel TV and its implementation.
Page 1
Table of Contents
1. Situation analysis
2. Business environment of Omantel
3. Industry analysis
4. Marketing Objectives
5. Marketing strategies
6. Implementation
7. Evaluation and Recommendations
8. Recommendation
9. References
Page 2
Situation analysis
Introduction-marketing plan
According to Regis McKenna (2002) the growth of competition during last few decades has
resulted in a much greater emphasis on formal planning for marketing. During this era the
marketing concept has been evolved. During 19th century business was focused on increasing
the production and believed that whatever the quantity produced can be sold. Subsequently
these ideas have changed in to sales concept where firms believe that by using sophisticated
selling techniques any volume of goods can be sold. Even this approached failed and the
concept of marketing has been evolved.
Marketing is the management process of identifying the customer need and satisfy those
needs profitably (CIM-UK).In order to carry out this marketing activity successfully the
marketing planning is vital since planning is the pivotal activity in the management process
and marketing also a management process.
Formal marketing plans have been drafted for long term and take in the general direction
which the company and its various departments are heading towards. This plan will be
presides and derived based on the corporate planning of the company. To support these
strategic plans more detailed plans are developed to cover the shorter term and the activities
which are necessary on a day-to-day basis.
This marketing plan has been developed with the intention of elaborating the proposed
marketing activity on launching a new product called “Omantel TV” to the Oman market.
Company profile and product portfolios
Omantel which has the intention to launch “Omantel TV” is the key player in the
telecommunication industry in Oman. 2009 statistics revealed that 53% of the market share in
the main telecommunication solution sector is with Omantel. It offers wide range of
telecommunication solution in Oman and it is listed in Muscat Securities Market.
Omantel operate with the vision of “Together, we build a totally connected community
through innovation”. This vision has been further elaborated by its mission statement which
covers the following main elements.
Page 3
Fulfill all communication needs of our customers.
Attract and develop talent in a team-oriented environment.
Deliver profitable growth to our shareholders
Source :http://www.omantel.om/OmanWebLib/AboutUs/CompanyOverview.aspx?
LinkID=5&MenuId=572
Omantel has been providing the following services to the customers in Oman.
Connecting people through the mobile and fixed line telephone services
Providing internet services (broad band)
Data transfer services
Proposed new product
Omantel will be launching a new product called “Omantel TV”. This will be a TV
entertainment package which comprise of large number of international, regional and local
TV channels to satisfy the various entertainment need of the customers. This product will be
sold as follows
Set up box which will work as decoder
A dish
Smart card
Customer will have a make an initial investment for the setup box and dish. Customer will
have to pay monthly subscription for the service and it can be paid on monthly or annual
basis.
Product options
Silver
Gold
Platinum
This classification is based on market segmentation which will be discussed later in this
report in detail.
Page 4
Business environment of Omantel
Omantel was having the monopoly status in the market since 2004 for the mobile connection.
Due to deregulation policy of the government it lost it monopoly status and competition
started. Firm continue to enjoy monopoly status in fixed line phone since 2010 until the main
competitor launched the fixed line phones. The present marketing environment has become
highly competitive and Omantel lose its competitive position due to state of the art
technology adopted by the competitors.
In order to sustain the profitability it is vital that firm need to diversify it is product portfolio.
This marketing plan elaborates its diversification in to entertainment industry which is
directly linked with communication.
Competitors
The following companies are the major competitors of Omantel in the existing market.
Omani Qatari Telecommunications Company SAOC (Nawras)
FRiENDi mobile
Sudatel Telecommunications Group Ltd.
The new market for entertainment sector has the following competitor brands
Showtime
Pehla
Arabsat
Nile sat
Business environment analysis
The environment of any business can be divided in to two categories which are internal
environmental and external environment. Internal environment analysis enables the firm to
identify its strengths and weakness and external environment help to identify the
opportunities and threats. External environment of the business can be analysed based on
PEST analysis.
Page 5
Political and legal environment
Following factors in the political and legal environment of Omantel has been analyzed.
Current and potential legislation at sultanate of Oman and international legislations
and proposed changes in both.
Trading policies of the government related to communication and mass media.
Pressure groups activities and their power in the local market which influence the
telecommunication and media sector
Oman government has been working in order to encourage free competition in the market. As
a part of this process Oman government has deregulated many industries in Oman including
telecommunication sector. This has enhanced the competition in the industry and compels the
firm to initiate different strategy.
Economic environment
Economic environment has high influence on the business operation and launching of new
product. Following economic environment factors have been evaluated prior to launching the
new product in the market.
Local and international economic trends
Policies of government taxation and subsidies for industries operating in Oman
Market conditions and status of the business cycles
Inflation and interest rates
Recovering international and local economic trend in the international economic environment
has created positive changes in the business environment in Oman. Increased government
expenditure has boosted the disposable income of the people and created economic boom.
Social and cultural environment
The following factors in the social and cultural environment have a direct impact on the
marketing activity.
Demographics such as age, sex and its impact on the social trends
Consumer attitudes and opinions and its impact on consumer buying patterns
Page 6
Advertising and publicity and its impact on cultural values of Oman
Technological environment
Latest development in the technology has created new opportunities in the
telecommunications sector and mass media sector. This includes the influence of satellite
technology in communication and advertising.
Industry analysis
Completion in the Industry can be analysed using the Michele Porters five factor analysis.
(Michael E. Porter 1980), Michele Porter identify the following factors in the competitive
environment
Bargain power of customers
Bargain power of supplies
Rivalry among the existing firms
Threat of potential entrance
Threat of Substitution product
Bargain power of customers
Since the customers have many option for TV programmes the bargaining power of
customers are high. Omantel should consider this aspect and ensure that the customers are
provided with value added services and satisfied.
Bargain power of supplies
Only few high popular TV channel providers operate in the Middle East region, especially in
Arabic language. This includes “Al-Jazeera” for news and sports and “Rotaana” for movies
and Music. The supplies may demand a premium price for the service provided by them.
Rivalry among the existing firms
Rivalry among the existing firm will be high since many firms in the market targeting the
limited number of customers.
Threat of potential entrance
Page 7
This industry need high capital investment and large amount of rent need to be paid for
allocation of space in the broadcasting satellites. Thus the threat of potential entry will be
less.
Threats Substitution product
Entrainment industry has large amount of substitute product. People may shift to internet as
an alternative for TV entertainment. This may restrain the market for entertainment products
such as Omantel TV.
Finding on the business environment can be summarized in to SWOT analysis. This SWOT
analysis has been used in the process of developing the marketing plant for Omantel TV.
Strengths
Reputed brand name as Omantel.
Well trained and fully equipped group
of employees.
Access to the state of the Art
technology.
Strong financial backup from
Omantel.
Weakness
Bureaucratic culture and autocratic
leadership within the organization
Resistance to change
Not adoptive to the rapid changes in
the business environment.
Opportunities
Growing demand for entertainment
product
Increase in the population
Threats
Competition from unauthorised
dealers and difficulty on restricting
the unauthorised service provision.
Local competition
Development in internet TV
Page 8
Note
Factors in the internal environment of the business ( not shaded )
Factors in the external environment of the business (shaded) which are taken from external
environment analysis.
Marketing Objectives
Marketing objectives for the new product has been derived from the corporate objective of
the firm. Corporate objective of Omantel is to archive 12 % growth in profitability every year
which will help to provide better shareholder value.
Based on this corporate objective following marketing objectives have been developed
Achieve 25% of the market share within first five year operation. At the end of first
year firm needs to achieve 5% market share.
Achieve 8 Million sales revenue during the first year of operation
Become the market leader in the sector within 10 years.
Above marketing objectives have been set based on the available resources in the
organization. Omantel can utilise its country wide sales and service outlets to sell the setup
box and dish. It can use its authorised agent who sells prepaid card to sell the smart cards.
Thus firm will not incur much additional cost on launching this product. Further it can use the
technical division on the Omantel (who presently install fixed line phones) to assist the
installation of dish and setup box. Additional training need to be provided to the technical
staff to make then equipped with the required skills.
Target Market and market segmentation
Omantel has identified its target market as the residence of Oman who prefers the TV
entertainment. Following traits of the target market can be identified based on the secondary
research conducted.
Page 9
Consumer taste in target market is rapidly changing. The entertainment what consumer
expects is highly dynamic. Thus Omantel has to keep a very close eye on the changing
consumer taste and change its channel portfolios according to the changes in the consumer
taste.
Marketing strategies
Marketing strategies are developed considering the four marketing mix elements which are
product, price, place and promotion. These marketing strategies are directly linked to the
marketing objectives and marketing environment analysis (SWOT).
Figure: 1 self developed
Market segmentation
According to Dunbar, L. and Melcolm (2004) Market segmentation is identifying a group of
customers who has homogeneous needs which can be distinguish from others. Omantel can
segment the market as follows and develop product according to the special requirement of
that market:
Page 10
Marketing plan
Income based segmentation
Consumers who obtain high income will be one market segment who is ready to pay high
price for premium channels. Second group will be the customers who obtain middle level
income and third category will be the customer who will get the lower level income. Based
on the different in the income the product can be classified as;
Silver: This package comprise of limited number of channels. This is targeted towered the
lower income people.
Gold: this package will have considerably large number of channels but will not get access to
expensive premium channels
Platinum: this package is target to the high income people and they will get access to all the
channels including expensive channels.
Alternatively firm can segment the market based on the psychology of the customers. Some
special package can be modified targeting the sports lovers.
Democratic factors play a vital role in segmenting the market. Family units comprising of
small kids and young adults and may demand different combination of channels in the
package what they demand.
Product
Product which will be launched by Omantel will have main three categories:
Silver package
Gold package
Platinum package
These three products are developed considering the identical need of three different segments
of markets as mentioned above. Each package has been modified based on the consumer
needs. For example the platinum package includes TV channels which promote luxury life
style and products.
Page 11
Price
There are two main possible pricing strategies available for Omantel.
Penetration pricing strategy
Market skimming pricing strategy
Penetration pricing strategy:
Market-penetration pricing is used where prices start low to drive higher sales volume from
price-sensitive customers and produce productivity gains. Through penetration pricing
strategy firms will be able to achieve its market share maximization objective. (Armstrong C,
1988)
Market skimming pricing strategy
Market-skimming pricing strategy can be used where prices start high and are slowly lowered
over time to maximize profits from less price-sensitive customers. This is more applicable for
the companies which come out with innovative technology and new products.
Omantel will be following the penetration pricing strategy for Omantel TV. It will sell its
product with low profit margin. Compare to other competitors in the market the packages
sold by Omantel TV will be cheaper. Firm will achieve its target profits and sales targets
through high volume of sales not through high sales prices.
This strategy is more appropriate because Omantel TV has a marketing objective to achieving
25% market share within five year time. An effective strategy should always facilitate the
firm to achieve its objectives.
Place
The main objective of the “Place” is to make the product or service available to the arm reach
of the customers. Omantel TV will achieve this objective by make use of its selling outlets
located throughout the country for sales of mobile and fixed line telephones. Omantel TV
will make use of these outlets to sell the decoders and dish antennas. Installation services will
be provided by technicians who are working for fixing land line telephones.
Page 12
Currently Omantel has countywide agent who will sell the pre paid Omantel cards for mobile
telephones. Same agents can be used by Omantel TV to sell its smart cards and annual
subscription card to the customers. Customers can purchase or activate their smart cards from
these agents as per their requirement (monthly or annual payments)
Omantel TV will be able to establish countywide distribution network without additional
cost. This approach also helps to utilise the excess capacity of the labour force in the
technical division of the Omantel fixed line section.
Promotion
Firm has two alternative strategy for promotion which are push and pull.
Push and Pull strategy
According to Kottler P (1988) pull strategy involves the seller using advertising and
promotion to persuade consumers to ask intermediaries for the product, thus inducing the
intermediaries to order it. Pull strategy is appropriate when there is high brand loyalty and
high involvement in the category, when people perceive differences between brands, and
when people choose the brand before they go to dealer to purchase. A push strategy involves
the manufacturer using its sales force and trade promotion money to induce intermediaries to
carry, promote, and sell the product to end users.
Omantel will be using the pull strategy to sell its product. In the SWOT analysis it was
identified that company has well reputed brand name. Omantel TV intended to utilise this
brand name and channel all its advertising effort to above the line advertising campaigns in
mass Medias to promote Omantel TV.
The objective of this promotional activity is to support the firm to achieve its marketing
objective.
Advertising objectives:
Increase the customer awareness of the product by 50% within a Year
Increase the sales by 25% every three month
Page 13
High price package
Low price package
Standard package Custom design package
Pehla Show times
FTA channels- Arab sat and Nile sat
CNB network
“xxx”
Promotional activity of Omantel TV will be as follows
Comprehensive TV advising schedules in popular local TV channels
Mobile phone advertising to the Omantel GSM subscribers ( text messages)
Radio advertising
Adverting in the popular magazines
fix hording in the main high ways
Positioning map
Figure 2: self developed
Above positioning map shows that Omantel TV will be positioned as a service provider with
custom design packages as per the need of diverse group of customers and sold in the market
at relatively lower price.
Page 14
Implementation
This marketing plan will have four main stages
I. Market research and test marketing
II. Product launch
III. Post launch evaluation
IV. Post launch controls
Following chart explain the detail implementation of this marketing plan
Task Action By whom When
Market research
and test marketing
Carry out market research in
order to identify the changing
need of the customers and their
perception
Test market the product in small
geographical aria.
This activity is
carried out by the
research and
development
department of
Omantel
Before
31/3/11
Product launch Carry out pre launch advertising
to the Omantel TV brand
Product launch
Comprehensive advertising
This activity will
be carried out by
the marketing
department
Before
30/5/11
Post launch
evaluation
Compare with the set target with the
actual outcomes of the brand
(financial and non financial evaluation )
Marketing
department and
accounts
department
30/9/11
Post launch
control
If the actual result deviates from the
planed result adversely then identify the
reasons for the deviation and take
corrective action.
Plan for the next year considering the
inputs from the current year.
Marketing
department
31/12/11
Table 1
Page 15
Gantt chart for implementation
Jan Feb March Apri
l
May June July Aug Sep Oct Nov Dec
Market
research
and test
marketing
Product
launch
Post
launch
evaluation
Post
launch
controls
Table 2
Page 16
Evaluation and Recommendations
Success of any marketing plan depends on how effectively that plan has been evaluated and
controlled. Effectiveness of this marketing plan will be evaluated based on the following
criteria:
Comparison of the monthly wise planned sales revenue with actual sales revenue
This criterion for evaluation is used to measure the performance of the organization in terms
of sales revenue.
Comparison of monthly target profit with the actual profits
This criterion is used to evaluate how effectively organizational resources are utilised to
achieve profitability.
Comparison of target unit sold with the actual unit sold
This will help to evaluate the effectiveness of the sales force and marking tools
Correlation between advertising expenditure and sales revenue
This criterion will be used to measure the effectiveness of the advertising tools used.
Recommendation
If the firm identifies considerable variance in sales revenue it has to revise its marketing plan.
Omantel TV needs to have a contingent plan to overcome the unpredictable event taking
place in the business environment.
If the firms actual profit levels does not match with the target profits then firm need to
identify the reason for this variance. This can be due to low level of revenue or may be due to
high expenses. Based on the fact indentified through research firm should take corrective
action.
Page 17
If the firm does not identify a positive correlation between advertising expenses and sales
revenue then the advertising approach is not appropriate. Omantel need to identify a
alternative advertising approach
References
Mercer D, 1996, marketing, 2ed edition, Black well, USA
Kotler, P. and Armstrong C, 1988, Marketing: An Introduction, Prentice-Hall,
Englewood Cliffs,NJ,
Dunbar, L. and Melcolm (2004) Market segmentation: how to do it, Oxford, UK.
Regis McKenna (2002), Total Access: Giving Customers What They Want in an
Anytime, Anywhere World, Harvard Business School Press, USA
Michael E. Porter (1980), Competitive Strategy: Techniques for Analyzing Industries
and Competitors, New York: Free Press.
Theodore Levit (1980), Marketing Success through Differentiation of Anything,
Harvard Business Review (January–February), pp. 83–91
http://www.omantel.om/OmanWebLib/AboutUs/CompanyOverview.aspx?
LinkID=5&MenuId=572 viewed on 12/12/10
Page 18