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T-Mobile Marketing Strategy Essay

Custom Student Mr. Teacher ENG 1001-04 27 September 2017

T-Mobile Marketing Strategy

Just like any other company T-Mobile are in business to make the maximum profit possible for their shareholders. In order to do this they must market their products and services effectively. This involves using the four P’s of the marketing mix

T-Mobile uses several factors to target different marketing segments. These segments are age, lifestyle, job and income. They tailor their packages and offers to attract a chosen market area.

An example of this can be shown by a package offered by T-Mobile called “Mates Rates”. With Mates Rates you can get cheaper text and calls to 10 chosen numbers, this is aimed at people who have a select group of contacts. Mates Rates is a unique form of penetration pricing, T-Mobile offer a cheap and efficient package in the hope that their customers will then upgrade to a more expensive package.

Competitor business O2 has received a lot of sales and publicity from having an exclusivity deal with the Apple iPhone. Google is currently in the process of creating two new mobile phones, the G1 and G2. These phones are said to be very similar to the iPhone although they will be running Google’s own operating system, ‘Android’. This means the G1 and G2 will undoubtedly be a step ahead of the iPhone in terms of functionality.

The news of these phones has meant that T-Mobile are trying to obtain an exclusivity deal with Google to try and emulate the success of O2 and the iPhone although whether T-Mobile will be able to market them as successfully as the iPhone remains to be seen.

There are two main forms in a market; a monopoly and an oligopoly. Monopoly is when a single company or person has control over a product or service. When a company is in power of a monopoly they can generally charge high prices and they will still keep their customers. This is due to no competitor pressure however if a company starts to charge too high others may enter the market and offer a more efficient adaptation of the service or product. An example of a monopoly can be shown by Royal Mail who has control of all postal services.

An oligopoly is where the market consists of a few competitive companies. Since there is only a small amount of competition companies will pay close attention to each others actions. An oligopoly is the most common market form and the best state for customers due to low prices. T-Mobile is in an oligopoly, there are many mobile providers which all compete this is why there is such a wide range of deals and packages.

Sponsorship

Product life cycle

Introduction

During products introduction it will be highly advertised and aim to gain a lot of attention. The product will be highly priced making it more exclusive and highly wanted. Sales of the phone may be low but they will be gaining an enormous amount of profit due to high pricing.

Growth

The product price may be gradually lowered and sales begin to rapidly increase.

Maturity

During maturity a products sales will peak and begin to decline. This may be due to competitors undercutting prices, new and better products on the market or just decline of popularity. It is common for an extension strategy to be employed to try and prolong product sales.

Decline

Decline begins due to the lack of need or want for the product. Product prices will be severely lowered and productions of the product will more than likely stop.

T-Mobile will often use a well planned strategy to maintain sales for example;

T-Mobile begin selling a new phone priced at �400, although it does not gain many sales it gains a lot of publicity and any sales made make a lot of profit. The price is gradually lowered to �199 at which point it makes the most sales and then sales begin to decline until the phone becomes forgotten and T-Mobile make no attempt at advertising it. When sales begin to decline T-Mobile may implement an extension strategy such as offering a better contract with the phone, unlimited internet usage, unlimited texts and calls etc.

Extension strategy

When a product reaches maturity businesses will begin an extension strategy to try and prevent their product entering decline. Businesses will spend a lot of money on research and development to come up with an effective extension strategy.

Basic strategies used are:

* Targeting different market segments

* Re-branding

* New packaging

* Modifying product features

* Re-pricing

As previously stated T-Mobile will often use a well planned strategy to maintain sales for example;

T-Mobile begin selling a new phone priced at �400, although it does not gain many sales it gains a lot of publicity and any sales made make a lot of profit. The price is gradually lowered to �199 at which point it makes the most sales and then sales begin to decline until the phone becomes forgotten and T-Mobile make no attempt at advertising it. When sales begin to decline T-Mobile may implement an extension strategy such as offering a better contract with the phone, unlimited internet usage, unlimited texts and calls etc.

Advertising

T-Mobiles slogan is “Life’s for sharing” and they employ this theme of togetherness in their adverts too. Since T-Mobile has so many competitors they put a lot of funding into advertising in order to achieve unique and attractive adverts.

T-Mobiles latest adverts are events based on the new ‘flash mob’ craze. This is when a large group of people turn up to a public place and get involved in an out of the ordinary event, in this case singing and dancing. Details of the event are passed around on blogging sites such as Twitter and Facebook.

On the 15th January 2009 T-mobile played music through Liverpool Street Station in London, hundreds of people broke into dance including ‘bloggers’ and passer by’s. The event was filmed and became an instant media sensation with over 2.3million YouTube views.

Hundreds of commuters horde to the center of Liverpool Street Station to witness the making of the T-Mobile advert.

Website analysis

The T-Mobile website is typically designed to flaunt its most profitable offers. The majority of the homepage is taken up by a feature on T-Mobiles latest ad-campaign, “free texts for life”. The viewing of phones is categorized to Pay as you go and pay monthly deals. When viewing these products the customer is presented with what is supposedly the ‘best deal’ however they are only the ‘best deals’ for T-Mobile as they provide the most profit.

When comparing the contract phones to the pay as you go phones I found that you have to search deeper to find the latest models on pay as you go where as they are very blatant on the contract section. This is as T-Mobile makes more profit from contract deals.

The website also offers the function to manage and check bills online. This means customers can top-up quicker and more efficiently.

After looking at other mobile provider websites I noticed they are all very similar and are made to promote the most profitable offers.

Online sales are becoming much preferred to store sales due to the ease and speed in which they can be accessed. It is crucial that T-Mobile maintains an appealing website as online mobile sales are ever increasing this is as the customer does not need to view the product to check for quality etc as they would with a more specific item such as furniture.

Rival businesses

The mobile phone service is an oligopoly. There are a small amount of companies who are all competing however the current market is dominated by Vodafone, Orange, O2 and 3 who control over 90% of the market. The rest of the market is made up by smaller businesses that do not have the funding to enlarge themselves even though a lot of the less popular businesses offer cheaper deals.

It has recently been announced that T-Mobile and Orange plan to merge thus gaining a much larger control of the market and the highest percent of control.

Pricing and product content is very similar between T-Mobile and its rivals this means that a large portion of sales is down to marketing and advertising.

Store location

The above picture shows the placement of a T-Mobile store in the Birmingham Bullring. The store attracts a lot of passing customers that are heading to other stores or exits. Neighbouring shops include ‘Abbey’ and ‘Suits You’, these stores typically attract wealthy business customers therefore this could lead to impulse buying of a T-Mobile product.

The T-Mobile store is located next to ‘bull’ a very well known attraction and often used as a meeting point. This means that people nearby will be occupying their time by looking in shop windows and could therefore be attracted to T-Mobile.

Store location

This satellite photo shows the placement of a T-Mobile store. The store is located on Corporation Street, one of the busiest streets in Birmingham. Also shown on the image is the placement of a McDonald’s store. In business McDonalds is renowned for getting prime store locations as restaurants rely on passing trade, this exemplifies the amount of shoppers that will pass the T-Mobile store.

The T-Mobile is specifically located on a busy corner, this means that there is a heavy amount of passing trade, T-Mobile utilize appealing window displays to attract this passing trade to their store. This can thus result in shoppers conducting an ‘impulse buy’ of a product that they had no intention of purchasing.

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