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Teaser for Telecom Pricing Seminar - graphical way to introduce some of the Value & Pricing Challenges faced by Telecom Operators -
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Strategic Management of Value & Pricing for Mobile
Web 2.0 Paradigm
14 Mobile Megatrends
1. From mega-portals to me-portals.
2. Content is aging; Content communication is king.
3. The internet is reaching into the phone.
4. The war of the application environments.
5. Value in mobile software is bubbling up.
6. OEMs go for services and vertical propositions.
7. Brand as the new form of equity in handsets.
8. Network operator strategies are shifting.
9. Browsing is out; engaging experiences are in.
10. Browser proxies bring the internet to the masses.
11. Open source is disrupting the status quo.
12. Nokia is now a tier-0 OEM.
13. Mobile is transforming to a FMCG business.
14. Channel ARPU: a new source of revenue.
Source: Andreas Constantinou, Ph.D. Research Director, VisionMobile
2 , 6 2 9
+ 38%
3, 07 1
2 , 2 8 9
5 1 6 6 9 8
1 , 0 5 4 1 , 0 5 4
6 7 7 4 1 5
4 0 9
+ 17%
+ 1 %
+ 21%
+ 24%
1 , 1 9 7
C A GR
w e stern european* mobile content sales (in M€)
7, 86 8
v i d e o / TV / i n t e ra c t i on
m u s i c , r i n g t o n e s & r i n g ba c k t o n e s
o t he r n o n m u s i c p e r s o na li z a t i o n
g a m e s
o t he r i n f o r m a t i o n & e n t e r t a i n m e n t
2 0 0 6 2 0 11
source : Jupiter Research (11/2006)
Western European mobile content sale (in M€)
•New Customers
•New Business Models
•….
So What ?
Mobile 3.0?
The whole world in my hands
= My Device is Me
WHAT DO WE DO WITH OUR MOBILE PHONES?
COMMUNICATION SMS
Picture Messaging
Send/Receive
Videos Social
Networking
Blogging
PERSONAL
PRODUCTIVITY Check Weather
Search the Web
Maps/Directions
Movie info
Stock Quotes
Financial news
Business
directories
Restaurant info
Trading Stocks
Transactions
NEWS BITES News
Product Info/reviews
Tech news
Health/Sport
Sports Information
Entertainment News
Horoscope
PASSING TIME Play video games
Download ringtones
Download
wallpapers
Download videos
Download music
Networked Customers
2 Way Value / Pricing Model
B2B VAS
Distribution
Ch
ann
el P
artn
ers
Content Owners
Retailers
Advertisers
Government B
rok
ers
/ I
nte
rme
dia
rie
s
Te
lco
Bro
kin
g s
erv
ice
s
Service Providers
Telco Retail
VA Services
Telco Platform
Distribution
$ $
Millions of
Customers
Thousands of
Segments
Wi-fi Community
with Innovative
Revenue Model
Ad subsidized
Mobile
Service
Free
Voice
Telephony
Ad subsidized
Internet
Access
New Business Models emerging
•New Customers
•New Business Models
•….
•New activities
•New challenges
•…
So What ?
Location based services
Advertiser…
Core customer data Name, Address,
Gender, National ID,
Profile & Preferences
MY PERSONAL DATA
Digital Lifestyle
Aggregators & PIM Pictures, Videos, Bookmarks,
History, Files ; Calendar,
Address Book, To Do, Notes
MY STUFF
Identity and persona
creation for user Number, address or ID
provisioning; porting; avatars
MY IDENTIFIERS
Naming and tracking
non-human resources .mobi domains, web
browsing history,
QR codes read
MY INTERACTIONS
Knowledge of
personal and
business interactions My bank, school,
workplace, friends
MY RELATIONSHIPS
User real-time activity
and environment Location, Motion,
Temperature, On/Off,
Roaming, In-call
MY CONTEXT
User ID linked to
physical device or
token; configuration SIM, USIM, SoftSIM, serial
number, profile & settings
MY DEVICES
Customer centric
Contextual
•New Customers
•New Business Models
•….
•New activities
•New challenges
•…
•A new Vision
•…
So What ?
Ahead: The Anywhere Network
A seamless,
far-reaching,
ever-present,
high-capacity,
personal
broadband
communications
platform
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. WiMAX & Wireless Broadband: State of the Industry and Market Outlook 2006 to 2011
February 22, 2007 Page 12
Personal
Broadband
The Vision
•New Customers
•New Business Models
•….
•New activities
•New challenges
•…
•A new Vision
•…
So What ?
…. But….
•ARPU is stagnant
•Data represents less than 15% of revenues
•Threats on Voice traffic
•New Competitors flocking in
•Consumers perceive Telco offers as undifferentiated
Houston, we have a problem
What are you selling ?
…. To Whom ? ….
Value Proposition
What drives Consumers’ Value Perception?
What are your product ratings vs
competition?
Perceived Value
Product Quality
Brand/Image
Service / Experience
Convenience / Availability
Price/ Promotion
User Experience
Handsets
Content
Network / Coverage
customer
customer customer customer
customer
So, the differentiated QoS model in the mobile space does
not aim to obtain additional revenue sources from third parties.
Rather, it is a method of managing the available networks more
effectively and being rewarded by the customer for doing so.
Buying criteria for mobile customers in %
(Germany)
25%
The network dilemma
The development of the mobile network was and still is a
very costly undertaking given initial investments for build out
and operational maintenance for several network technologies
deployed in parallel. Not to mention the need to further
enhance these technologies (e.g. EDGE and HSxPA) over time.
Eventually, new technologies will enter the markets that also
require investment for additional build-up since it is unlikely
that the existing radio technologies will vanish in mid term.
20%
15%
10%
5%
0%
19%
5%
24%
9%
10% 10%
17%
13%
Qos/Coverage Pricing Handsets Community
But in a market where the revenue from minutes of use is
decreasing, budgets for investment in the network are likely to
fall as operators find it increasingly difficult to justify these
investments on a RoI (Return on Investment) basis.
While core network systems currently have more than sufficient
capacity, the radio access network is beginning to get extremely
crowded in some areas.
Figure 1: Impact of traffic on cell blocking
First tier MNOs Second tier MNOs
Source: Arthur D. Little Analysis 2006
Feel you’re not getting enough return on your marketing investment?…
Value & Pricing are the largest Profit levers…
…increases profit 12%
9 101
Raising price by 1%…
Sales Fixed costs
• COGS
Operating
profit
66
26
8
100
Value / Price
SPMG
can help you Find the right Balance
Visibility Experience
Quality Brand
ConvenienceExperience
QualityBrand
Value & Pricing strategy
Results
Sales growth
Segment share
Profitability / ROI
Actions
Pricing & Value levers
Value Proposition
Marketing Spend
Price
Product quality
Promotion
Research
Attitudes / Value Drivers
Consumption funnel
%
% % %
use repeat
awareness trial
How do you Stand out ?
•Understanding Customers’ Value Drivers
•segment & fence Market
•Develop Targeted Value Propositions
•Define Effective Business Models
•Select the right Price level
•Evaluate Potential & Target price for new products
•Optimize Clients’ Lifetime Value
SPMG can help you
Experience / Brand Advocacy
CompX acquired an average of 20 000 new clients per month
Pricing research showed that a different client focus and lower upfront fees should greatly enhance new client acquisitions
Indeed, that difference translated into a trebling of new client acquisitions & over €300Mio in extra profit
20 000
9.30
9.95
Bottom Line Impact
60 000
Introduction to
Strategic Pricing Management Group
• Strategic Pricing Management Group (SPMG) is a Leading pricing strategy Consultancy. We help large organizations achieve their profit goals by analyzing their price challenges, and by helping them to develop and implement a price strategy that captures the most value from their products and services
1-Introduction
Currently, Strategic Pricing Management Group is present in 10 countries and is doing projects in the five continents.
Projects developed in the last year
SPMG Group Offices.
International Offices
North America
Canada – H.Q
Michael Hurwich, CEO & President
Zoltan Lorantffy, Director
United States
Alain Meloche , Vice-President
Europe
Europe
Loic Le Corre, Managing Partner
Western Europe - France
Eric Jacolin, Partner
Western Europe - Germany
Heinz Otto Luehr , Partner
Central and Eastern Europe - Hungary
Eniko Pongracz, Partner
Asia
China -Hong Kong
Edward Chan P, Eng, Partner
Indonesia - Tangerang
Erwin Husin, Partner
Latin-America
Brazil - Rio de Janeiro
Alex Carneiro, Partner
Mexico – Mexico City Miguel Legorreta, MBA , Partner [email protected]
Page 37
Strategic Pricing Management Group – Range of services
Research
• Client/Consumer Value Drivers research • Price change impact research • Transactional analysis/ Modeling • Client Value & Satisfaction studies • Product potential & ‘Willingness to pay’ • Client/Consumer segmentations • …..
Ad
vis
ory
• Value Based Pricing • Pricing Strategies & Tactics • Competitive Pricing / Price Wars • Implementing Price Increases • Channel Pricing • New Product Launch • ….
Process • Development / Reinforcement of Pricing Capabilities
• Redeployment of Pricing Processes • Management & optimization of ‘client conditions ’ • Multi-Channel Pricing / Pricing Corridors • Change Management • Value Propositions / Design to Price • Pricing Software implementation • …..
S
up
po
rt
• Sales Force Training / Motivation • Support/ Training of Pricing / Marketing teams • Decision Support Systems • Deployment & management of ‘Test Platforms’ • Product/Service Full Cost Analysis • Pricing Process deployment • Pricing & Competitive Intelligence & Benchmarking • …..
Pri
cin
g
Str
ate
gy
Pri
cin
g
Man
ag
em
en
t
Pri
cin
g
So
luti
on
s
Strategic Pricing Management Group Europe Specificity of approach proposed
• Senior Project Management team
• Process & Change Management Expertise
• Client Integration
• Unique Pricing Expertise
•Case Experience •World Class pricing Framework •Benchmarks
• Strong Analytical capabilities
•Market Research •Statistics •Modeling •Decision Support Tools
Important direct involvement of Key Senior staff on project
Dedicated Pricing Management Practice – full use of most effective
change & project management methodologies
Shared case team with systematic knowledge transfers Consensus building
Only Pricing… but all aspects of Pricing.
Case Experience De Facto standard for Professional Pricing Organizations Unique Benchmark database, developed over 20 year of Pricing consulting
Strong Analytical capabilities Strong B2B & B2C research & benchmarking capabilities Strong analytical & statistical capabilities
Recognized expertise in a priori modeling of impact of strategies Tools used for project to be left to Air Liquide for future use after project is completed
