International Marketing

1
International Marketing

•  Mobile Phones in the European Union 

November 2009
2
The theory behind TAM (Technology Acceptance
Model)

• A considerable body of scientific literature in
  Marketing and IT/MIS
• Key variables Perceived usefulness perceived
  ease-of-use
• Other variables perceived behavioral control,
  perceived risk, demographics (age, gender)
• (1) Perceived ease of use gt a number of your
  arguments
• (2) Perceived usefulness of 3G ???? Are the
  features really perceived as useful (especially
  when price is considered)
• (3) Perceived risk electromagnetic waves near to
  the ear may cause brain tumors, a sensitive topic
  that is still undecided in terms of medical
  evidenceactivities that require a continuous
  attention (ex. driving)
• (4) Perceived behavioral control and circumstance
  of mobile phone use (car, restaurant, classroom,
  train, church etc.)
• Suggestion increase (1), (2), and (4) decrease
  (3)
• Segmentation according to demographics (age,
  gender) business users vs. non-business

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Mobile operators (MO), handset producers (HP) and
software developers (SD) a  supply chain 

• B2B relation between MO and SD is price driven
  and competitive
• Software developers need hardware developers (HP)
  and may not optimize the functionality of 3G
  applications for final users because MO are keen
  to sell minutes or MegaBytes of information
  transmission
• The supply chain does not work per se. It is the
  MO responsibility to make it work with other
  actors having the real technical solutions

4
Q1. How can mobile operators, software designers,
and handset producers inspire Europeans to use
their mobile phones for longer lengths of time
and for more applications?

• Mobile operators
• Price / Tariffs / Special offers
• Cheap flat-rate fees for teens/persons in their
  twenties
• Personalized/Attractive contracts and tariffs
• Free trial applications
• Try to change peoples habits to make them
  consume more (free SMS during one month, then
  they will get used to it)
• Free favorites numbers
• Free/Cheap calls when calling somebody that has
  the same operator
• Larger offer of subscriptions (SMS/MMS,
  downloads, calls, e-mails, etc.)
• Content
• Create fidelity program (points that you can
  collect)
• Create community (ex. Swisscom Youth Zone)
• Updated and diversified information on the portal
• Additional technological features
• Partnership with Zattoo (program to watch
  television on internet) for live TV
• Use mobile phone as a credit card (operators will
  then get a commission)
• Dense signal coverage

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Q1. How can mobile operators, software designers,
and handset producers inspire Europeans to use
their mobile phones for longer lengths of time
and for more applications?

• Software designers
• Applications which make life quicker and easier
• Web browsers
• News/Weather forecasts
• GPS/Navigation software
• Instant Messaging/Blogging (Skype, Windows Live
  Messenger, Facebook)
• Language software to improve your vocabulary or
  spelling
• Bank transactions
• Ticket purchases and payment options
• Entertainment options
• Games
• Sound and video player (live TV)
• Sport software that measures your steps and your
  pulse
• Decorative capabilities (ex. personal logo and
  celebrity photographs)
• Technological characteristics
• Performing operating systems
• User-friendly download interface
• Large choice of applications
• Access to secure networks

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Q1. How can mobile operators, software designers,
and handset producers inspire Europeans to use
their mobile phones for longer lengths of time
and for more applications?

• Handset producers
• Hardware characteristics
• Longer battery life/better battery quality
• Larger storing memory
• Photo and video camera (including
  video-conference)
• Handset Design
• Touchscreen
• Customized design (color, shape, covers) like
  DELL for PCs
• High-Tech design
• Very easy-to-use phones with big buttons and a
  bigger screen for elder people
• Suitable/Ergonomic shape
• Compatibility with other devices
• Bluetooth headsets and car kits
• Computer port and datacard for notebook PCs
• Other features
• Longer warranty
• GPS/navigation hardware

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Q1. How can mobile operators, software designers,
and handset producers inspire Europeans to use
their mobile phones for longer lengths of time
and for more applications?

• Segmentation business users (Intranet access,
  GPS, etc.) / leisure users / young people
  (design, pictures downloading, music downloading,
  etc.)
• Specifically target and limit applications at
  specific price to avoid overpricing (especially
  for youth targets)
• Handset design factors and software capabilities
  should most likely be combined with price
  incentives
• gt Do users really want multi-function phones or
  do they prefer specialized phones (with specific
  applications)?
• Do they want a mobile phone or a full
  communication tool?

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Q2. Using the cultural differences highlighted in
the case, outline a 2G strategy targeted to one
northern and one southern European country, that
will explicitly take these differences into
account

• Countries chosen
• South Italy (16x), Spain (1x), Portugal (1x)
• North Netherlands (9x), Sweden (3x), Germany
  (3x), Norway (1x), Denmark (1x), UK (1x)
• Cultural Differences
• South Polychronism, Collectivism, Masculinity,
  Being, Externalization, Language (needs more
  words), Changes (like to have some changes),
  Value of money (Call costs dont have that much
  importance)
• North Monochronism, Individualism, Feminity,
  Doing, Neutralization, Language (direct), Changes
  (dont like changes), Value of money (dont like
  to spend too much money for phone calls)
• Other differences climate, local regulations,
  symbols, religion, history

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Some theory Looking at (real) cultural
differences

• Start from the surface before digging deeper
  look first at a consumption behavior and its
  context in as great detail as possible
• Freedom dimension
• Pleasure of talking (i.e. oral culture favoring
  speaking over writing)
• Being reachable / (permanent) social connection
• Possibly disturbing others (proxemics, Hall)
• Sensitivity to perceived risk (health issues)
• Meaningful differences communication patterns,
  individualism-collectivism, language, time
  orientations (monochronic/polychronic),
  orientation to others
• Communication patterns differ across Southern and
  Northern Europe
• Individualism does not significantly differ
• Time orientations differ

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Findings from Valette-Florence, Ferrandi, and
Usunier (2001) about differences in time
orientation between France and Germany, and their
influence on use of mobile phone Mobile phones
involve daily routines in reference to
chronological time (Newtonian time), saves time
(economic time), and enables immediate voice
communication in order to relate to others
(unorganized-time). Using a mobile phone allows
the individual to manage activities
instantaneously, much like a polychronic use of
time. An initial qualitative survey was set up in
order to determine the main components of mobile
communication behaviour through a focus group of
twenty French mobile phone users. Three main
dimensions appeared to be relevant for users
freedom, contact with other people, and
instantaneous behaviour. Interestingly, these
dimensions are located on different levels.
Freedom is a means-end interpretation of a value,
contact with other people a social benefit, and
instantaneous behaviour a functional benefit.
Seven items were generated in order to capture
these three dimensions1 of the mobile
communication attitude. In France, two time
styles dimensions, economic time (.295) and
tenacity (-.229) had an influence on the general
mobile communication attitude. The link between
economicity and mobile communication attitude
suggested that the French associate the use of a
mobile phone with the capacity to organize their
own lives and to save time. The French have been
described as intellectually monochronic but
behaviourally polychronic (Hall, 1983).
Monochronism is more associated to tenacity than
polychronism, explaining why tenacity in the
French time style is negatively associated with
the overall mobile communication attitude. In
Germany, preference for quick return (.346) and
non-organized time (.313) were found to have a
significant influence on the overall mobile
communication attitude.
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The positive link between preference for quick
return and mobile communication attitude
suggested that Germans associate the use of a
mobile phone with instantaneous behaviour. The
positive relationship between non-organized time
and mobile communication indicate that mobile
communication is also associated with flexible
time and instantaneous behaviour. The Germans,
traditionally described as being monochronic and
valuing organized time, paradoxically associate a
positive attitude to mobile communication to free
and spontaneous behaviour. These findings
indicate that consumers are not sensitive to the
same product benefits, depending on country and
time style. French consumers mostly value the
economicity aspect of using a mobile (saving
time). The Germans put more value on mobile
communication to get immediate gratification and
to create space in their lives for unorganized
time. 1 Jöreskogs Rhô (reliability
indicator) is .96 for Instantaneous behavior (2
items), .98 for Freedom (3 items) and .96 for
Contact with other people (.96).
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Q2. Using the cultural differences highlighted in
the case, outline a 2G strategy targeted to one
northern and one southern European country, that
will explicitly take these differences into
account

• Prices differences
• South monthly subscription that contains
  unlimited calls
• North many offers with unlimited SMS
• Handset design
• South high-Tech, fashion, entertainment
• North big keyboards, high quality, neutral
  design
• Use of mobile phones
• South everywhere, to keep in touch, own several
  subscriptions
• North often banned in public places, economical
  way of calling, concerned about electromagnetic
  waves, business use
• Strategy
• South free SMS for each call made, advantageous
  price for family numbers (family-packages),
  limited series phones (Prada or Gucci),
  picture of the person callingdevelopp MMS
  services, create flashy phones
• North try to make people call (offering them
  free numbers to dials to change their habits),
  give free minutes, improve agenda/organizer in
  the phone, insist on security

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Q2. Using the cultural differences highlighted in
the case, outline a 2G strategy targeted to one
northern and one southern European country, that
will explicitly take these differences into
account

• Competitive environment different in each country
• Users segmentation business users, leisure
  users, young users is rather culture-free
• Some segments are likely to be rather
  transnational (e.g. young users) and relatively
  culture-free
• Motivations for acquiring a mobile phone differ
  according local circumstances (safety for women)

14
Q3. Taking the case of mobile operator Orange,
what would you advise as a pan-European 3G
strategy?

• The context high prices for UMTS licenses (3G)
  costly investment in new equipment have caused
  difficulties for the mobile phone industry in
  Europe
• Robins (2003) recommendations Market
  segmentation (business users vs. leisure users,
  desired content for each segment), recreational
  services, regularly add content, games, weather
  forecast, secured transaction mode
• Price reductions
• Education of the consumers (not easy)
• Addiction factor once a customer uses 3G
  services, he quickly becomes addicted
• Improvement of the services, high-speed
  connections
• Regularly add new content
• Advertisement (with the risk of investing for
  other brands)
• Roaming attractive price from foreign countries
  (EU)
• Compatibility between countries (3G standards)
• gt Standardized package with local adaptation