2.0 Background
Krispy Kreme was established by doughnut maker named Vernon Rudolph in the mid-1930s with bought a secret recipe for yeast doughnuts from a French pastry chef out of New Orleans. On July 13, 1937, Rudolph moved to Winston Salem and opened up a wholesale business selling to local grocery stores. People who walking by Rudolph’s plant began to demand hot doughnuts, so he starts making doughnut to be available and sold them out on the street. Krispy Kreme Company have listed on the NASDAQ National market as KREM since its initial public offering on April 5, 2000 (Krispy Kreme Announces 2-for-1 Stock Split 2001). Unlike other companies that may make known of their products by advertising, Krispy Kreme Company marketing philosophy is no advertising. The Company relies entirely on public relations to establish its presence and drive sales by building a long-term relationship with its customers. After the first successfully opening its first Krispy Kreme Donut store in Issaquah, Washington State, Company is considering to open another donut store in Seattle to expand its sales channel in Washington State. In addition to this, Krispy Kreme is relatively small because it has just 292 stores compared to Dunkin’ Donuts 3,600 U.S. locations. Like Dunkin’ Donuts, Krispy Kreme expands in both large and small US markets. Krispy Kreme will go wherever there is a need. With all of the company’s publications, it is not surprise that Krispy Kreme continues to expand. For the first time, it successfully expanded nationally during the late 1990s in California. One large factor of Krispy Kreme’s continued financial success has been their expansion into international markets. They have expanded into Mexico, Canada, the United Kingdom, Australia, New Zealand, Japan, South Korea, and Spain.
3.0 Marketing Objectives
Krispy Kreme expands their company either domestically or internationally and this marketing objective was to align the company with highly capable, well-capitalized and experienced food operators. After their initial success outside of North America, Krispy Kreme became confident that its doughnuts would be well received throughout the world and to attract more customers. In addition to this, with using public relation as their marketing strategy, their main objective is to established its presence and make their sales by building a long term relationship with its customers. Besides that, Kreme Krispy also survived by word of mouth and by people recommending it to friends and colleagues, so this can be emphasized on local community and propelled the brand. Even though Krispy Kreme using at a low marketing budget with relaying on each communicate to propel their doughnut, but with their origins in Small suburban locations which will give them prime opportunity to reach the community. So this marketing objective was one of the ways to make their doughnut distribute efficiently among the consumers.
4.0 Question One – Marketing Strategy
4.1 Promotion Strategy
CE John McGuigan was quoted as saying ‘The strategy is that in many ways there is not a strategy’. According to the article, it stated that the other fast food chains such as KFC and McDonald were strongly emphasized at advertising through television advertisers as one of promotion strategy and spent two-third of their budget in advertising that aim to attract kids. Therefore, CE John McGuigan said that although spent much money in advertising and different promotion strategy aim in promote their products, there still are not a strategy to attract consumers to purchase and consume it. Besides, CE John McGuigan also stated that they are more engage in sampling as a promotion strategy that do not involve much cost rather than engaged in traditional advertising in running their business. Thus, it is clearly to show that CE John McGuigan was quoted as saying ‘The strategy is that in many ways there is not a strategy’.
According to the question one in this case analysis states that Krispy Kreme does not have marketing strategies in running their business. It is strongly disagree that Krispy Kreme does not have marketing strategies. According to this case study, it is had mentioned that Krispy Kreme emphasize on used of public relations as a marketing strategy instead of using advertising to promote their products. The marketing strategies consist of target market, product, pricing, distribution and promotion. Therefore, public relations define as one of mass communication tool in promotion strategy. Furthermore, Krispy Kreme also mainly involve in using sampling, word-of-mouth and trial of products as a promotion strategy in running their business.
Krispy Kreme is defining as using public relations as a promotion strategy in running their business it is because they create awareness and building company image with consumers. According to the Kotler, he stated that public relation is one of major mass communication tool in Integrated Marketing Communication (IMC) that uses to promote products. Thus, public relations is defined as building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image and handling unfavorable rumors, stories and events. It is clearly to say that Krispy Kreme are successful in promoting their products through public relations when they are able to communicate and build relationship with consumers as a first step close with consumers and able to create awareness among them to try on doughnut. Besides, they also use factory stores where consumers can see the process of making doughnut through a glass window to create awareness of consumers to buy and try on it immediately. Therefore, Krispy Kreme more focus on build relationships close with consumers and create awareness as a first step in promoting their doughnuts through public relations. Thus, public relations is consider as marketing strategy which can arouse curiosity and create awareness among consumers in successful ways in term of involve much resources in advertising.
4.2 Placement
Secondly, Krispy Kreme is defining as using placement or distribution strategy in running or operating their business. Placement is defined as whole system delivery at the right time and right place. It is a fastest one to change in simultaneous way. Krispy Kreme opened their open stores at Australia and United States. In Australian market, Krispy Kreme targets their markets at international airport, in the Sydney CBD, schools, sporting and social clubs as a place those doughnuts are able deliver at the right time and right place to consumers. Those are playing a role as a retailer at different outlets. There are several channels that Krispy Kreme involves in placement strategy which are channel one and two. Channel one is direct channel and it involve manufacturer and consumers. It is meaning to say that manufacturers are referring to factory stores. They mainly involve in manufacturing doughnuts and sell directly to consumers through factory stores. It is clearly to say that retailers or buyers can order or buy directly from factory stores at different outlets.
Besides, channel two mainly involves manufacturers, retailers and consumers. Retailers normally buy products in large quantities from manufacturers which are refer to Krispy Kreme’s factory stores either through manufacturers or wholesaler and then sell smaller quantities to the consumers. Thus, schools, sporting and social clubs play as a roles of retailers and sell doughnuts to student as an end users. In this case, Krispy Kreme doughnuts delivered multiple times during the day from nearby factory stores to bakery shop at different places and sell to consumers through their own doughnut stores. Thus, Krispy Kreme is defining as using placement or distribution strategy in term of distributes and sells their products to end users through retailers such as schools, sporting and social club in order to operating their business in efficient and effective ways.
4.3 Target Market
According to the question one, it is strongly disagree that Krispy Kreme does not have marketing strategies. Marketing strategies consist of target market, product, pricing, distribution and promotion as mentioned before. Therefore, Krispy Kreme emphasizes on target market as a marketing strategy to run and operates their business in a successful ways. Target market can be defined as company decides how many segments need to target on and which ones it is able to serve. Krispy Kreme defines a set of buyers who sharing common needs or characteristics that they desire to serve on. In this case study, Krispy Kreme target their markets and open their stores at the areas of international airport, strip shopping centers along the highway, Sydney CBD, schools, sporting and social clubs. According to this case study stated that Krispy Kreme opened its first two stores at Australian in the area of outer western suburbs of Sydney at international airport and in the Sydney CBD. Thus, it is clearly to see that Krispy Kreme target their market and opened their stored at crowded place in order to gain awareness and attraction of consumers. Thus, Krispy Kreme desires to targets on their markets is children, teenagers and young adults as well.
On the other hand, the main objective that Krispy Kreme opened their stores at international airport, strip shopping centers along the highway and Sydney CBD is to attract and create awareness among consumers when they pass by the stores. It is because Krispy Kreme uses factory stores where consumers can see the process of making doughnuts through a glass window to create awareness of consumers to buy and try on it immediately. By target the market of students will also help Krispy Kreme to attract more children or students in schools, sporting and social clubs through direct and convenient ways. Thus, Krispy Kreme is able to enter their target market that desire to serve and will help the company increase the sales from each doughnuts store.
5.0 Question Two
5.1 Public Relations
Compare to their competitors like Starbuck, Panera Bread and Dunkin doughnuts, Krispy Kreme used low budget to sell their product because they use public relation as their marketing strategy instead of advertising. Public relation is one of the major mass communication tool which any activities or events helps to promote a favorable relationship between a company and its customers and prospects; activities used to influence and promote a favorable image of a company and its products or services. Krispy Kreme use public relation to attract their customer, this is because public relation can build awareness and a favorable image for a company or client within stories and articles found in the media outlets. This is because public relations consider as a highly credible form of promotion. It helps to establish Krispy Kreme in the minds of targeted customer group by capitalizing by the influence from the media. Beside that for generations, Krispy kreme have survived by word of mouth by people recommending it to people and colleagues. So, an emphasis among the people will also propel the brand and this also means that they relay on each community to propel their brand.
Further, public relation is also important in monitoring numerous media channels for public comments about a company and its product. For example, in the 1980, the folks in Winston noticed sales at the Chattanooga store were going through the roof and headquarters decided to send a man up to Chattanooga for a visit and this has cause the store manager to printed up advertisement that Krispy Kreme as one of the Hot Doughnuts at that time, with this, a sale tactics was born and this will attract more customer in trying their doughnuts and meet the purpose of the public relation which also to build goodwill among an organizations target market through community. Public relations help Krispy Kreme especially in the late 1990s, when Krispy Kreme expand domestically in California, it help them to become success in order to promote their product because they have a groundbreaking event with an entering angle to attract news outlets to cover it and advance the store opening and this marketing technique helped Krispy Kreme to break the record for sales and win the title of Franchise of the year.
However, applying public relation as marketing strategies might not be effective. Firstly, because public relations use many of same channels as advertising such as newspapers, magazine, radio and others , it will differ significantly from advertising in that marketers because they do not have direct control over the message that will be delivered and where it is place by delivery. Secondly, public relation can be less effective as marketing strategy because the final message may not be exactly what the marketer has planned. It was while other promotional messages are carefully plan and distributed written through pre- determined placement in media channel and public relations normally will conveys information to a member of the news media which then will redrafts the information as part of a new story or feature. Thus, the final message which distributed by the media channel might not be meet by the objectives which has been set by the marketer. Thirdly, public relation campaign has the potential to yield a high return on promotional expense and also potential to produce the opposite if the news media feels that there is little value in running the story inclined by the marketer.
5.2 Sampling
In addition to this, Krispy Kreme also uses sampling to attract and sell their product. Sampling is free or discounted product provide by a store level which often use to introduce new product. With this, Krispr Kreme can attract more consumer with encourage consumer to try their product and after they have try it and think that their product was better than their competitors this will make the consumer to purchase it more frequently. This loyal customer make Krispy Kreme doughnut become well known and cause word of mouth to spread about it and attract other consumer to try and purchase their product. However, sampling also has several weaknesses that will affect marketing strategy seem to be less successful. The main factors or circumstances that will affect Kripy Kreme’s marketing strategy seem to be less successful in terms of different preferences of doughnuts among consumers, emotional of consumers during purchase and consume doughnuts and experienced that consumers gain after consume doughnuts. Thus, both strategy have several circumstances that will affect the marketing strategy seem successful or less successful.
6.0 Question Three
6.1 Strategies to handle criticism
Krispy Kreme has been criticizing as contributing as rising level of obesity especially in Australia. This Health consciousness is affecting the marketing strategies for indulgent fast-food products. Over 27 percent of adult’s nationwide report that they are controlling their diet.
One of the strategy that could be use to counter this critics is, according to Holland (2003) article in Fortune claimed that Ron Paul, President of Technomic in one of the Chicago food consulting company, have comment on Krispy Kreme and claim that all kinds of company sells sweet product but Krispy Kreme have their own strategy to sell and distribute their own product. In addition to this, Holland (2003) have argue that, krispy Kreme have success to gain good image in the market cause by their strategy which about developing long and happy customer relationships. In addition to this, according to Sweet Temptation(2003), many people relate Krispy Kreme with the sort of doughnuts that they ate when they were young and this have been supported by Krispy Kreme’s Vice President of Marketing, Parker. Beside that, Holland (2003) argues that Krispy kreme was here to stay and he has claim that its product not only loved by the people but understand and share it with the world. For example the world can see Krispy kreme memorabilia displayed in the Smithsonian Museum of American History in Washington where its sit next to the Fonz’s leather jacket from the Sitcom Happy days.
Further, Krispy Kreme can criticize that the collection depict stories of entrepreneurship and invention of the introduction of mass production and the marketing of prepared foods and connections in the Krispy Kreme between regional culture and commercial culture. Another strategy to overcome the critics is through survey. Krispy kreme can manufacturer trial produce of doughnut which are more nutrition for example less sugar or low carbohydrate doughnut and conduct a survey. This survey might be in person survey or online survey. If the trial was success and have good response from their customer then they can continue to produce and sell the doughnut. Krispy Kreme also can use testimonial to identify the weakness of their product so that they can improve their product and compete well with their competitors.
7.0 Question Four
7.1 Importance for market research
Based on the article, it seems like Krispy Kreme has not doing much research on its market performance, competitors, products, customers demand, etc. Thus, they faced downturn when a problem on obesity occurred in Australia and the policy of low-carbohydrate Atkins diet was enforced in the US. Instead, they would have prepared on something as a back up whenever something unexpected happen in future.
Krispy Kreme should have surveyed or does market research on its customers demand. This is because due to the customers’ rapid change in taste and preferences from time to time, they tend to switch to other brand (doughnuts) and Krispy Kreme will face customer losses. Competitors like Starbucks and Dunkin’ Donuts will most probably take this chance to produce better doughnuts or other related food in the range. Since they also sell homogenous food, they will easily get customers attention just by simply adding new flavours to their food. Moreover, customers always expect for something new to come and that is when food-based firms take the opportunity to produce demanded particular food at the moment.
Less market research of Krispy Kreme has created less awareness among consumers. Since the company only rely on word-of-mouth, public relations and sampling to make expose its products, public are not really aware of its existence in the market. Word-of-mouth will most probably only be told among neighbourhoods, public relations is something to do with opening the glass window to allow customers to see how the doughnuts were made and this way of promoting is only limited to people of the area. Sampling in the other hand has been carried out and yet since there is only limited amount for sampling, Krispy Kreme will not giving out people free doughnuts everytime they said it is their first time tasting it. Again, market research on what are the customers demand is important as to ensure which type of doughnuts are at the peak demand at the particular period of time. This way, Krispy Kreme can avoid marginal cost added to every single unit of doughnut of which its demand is not very responding at the moment.
The implications for the importance of market research is that it creates awareness to customers, as mentioned earlier. With proper advertisements and simulated test markets, customers will be aware of the new product in the market and they are curious people, tend to try on something new. As long as the advertisement is effective, it has created curiosity among the customers of which most probably they will go down to the nearest store and buy a small packet at least to have a try on it. Another implication is customer loyalty. Through market research, a firm knows its customers current demand, taste and preferences. This is also the way to maintain the relationship between customer and producer. Once the firm is updated with the current taste of its customers, it will produce the products at certain amount to satisfy the customers’ wants and demand. Thus customer loyalty is maintained. Apart from that, the implication of market research is to know what has the competitors done recently. Meaning to say what has they come out with recently; be it a marketing strategy, new products in the market, or promotions. Market research can be done through the observations of the products’ packaging, positioning, target market and the product’s rebranding strategy. A firm is to be aware of these threats because without updated market research from time to time, customers will easily switch to other better brands offered in the market if the particular firm does not make any improvement on its products to compete with its competitors.
8.0 Question Five
8.1 Early Indicator
Krispy Kreme’s problem in the US in 2004 was about the enforcement of the low-carbohydrate Atkins diet by the government as to make Krispy Kreme release low-carbohydrate doughnuts. Since this company’s main ingredients in making doughnuts is wheat flour of which is contains 80% carbohydrate, Krispy Kreme think this is a real threat to its core products. Other stores took this opportunity to produce low-sugar doughnuts, of which led Krispy Kreme to the bottom of the market.
In the other extreme, in Australia Krispy Kreme also faced a challenging market environment whereby it competes with KFC and McDonald, two strong franchise fast food firms. In 2003, there was an obesity issue among children and other fast food lovers. This issue has set a very low demand on fast food including Krispy Kreme which produces sweet products with chocolate and cookies toppings. Yet to say problems in the US leads to the fall of demand in Australia, it is not true. This is because the low-carbohydrate diet policy in the US has nothing to do with Australia demand on doughnuts, because at any way it will not affect the consumption of Aussies having doughnuts as their favourite and most rated fast food compared to KFC and McDonald. Obesity issue can be solved by reducing the amount of sugar in doughnuts. Even if Krispy Kreme does not reduce the amount of sugar, it may come out with other alternatives such as ‘Traditional Cake’, original taste doughnuts with no toppings and fillings. The fall in demand in Australia will most probably caused by the lack of advertisement and marketing strategy. Word-of-mouth, public relations and sampling are not enough to keep Krispy Kreme runs smoothly in few years time due to free market entrance of other competitors which may come out with new fast food in future. But somehow, this company still survived with its so-called marketing strategy such as public relations, sampling and word-of-mouth. Although without practicing the traditional way of advertising like such other fast food companies, Krispy Kreme has successfully sent its doughnuts to media outlets, made available to 1200 schools, sporting and social clubs as fundraising media. It was a sign of ‘sharing’ that Krispy Kreme did so, not for profit alone.
8.2 Fad Product
Krispy Kreme may be a fad product if the company does not have proper or effective advertising media such as newpapers, brochures, television, flyers, billboards, etc. Defined as a product which caught fame early and drops early in a short run, Krispy Kreme might be one if the company is unaware of other competitors’ strategies because other competitors will always try to grab customers’ attention by creating or innovate their existing products to be better or improved.
9.0 Conclusion
In conclusion, Kripy Kreme has marketing strategy in running their business at Australian and US market. Therefore, it mainly involves in the marketing strategies of promotion, target market, placement or distribution and product strategy in attract and running their business. Public relations and sampling plays an important role in attracts their customer, create awareness and build a favorable image for a company or client within stories in the media outlets. Besides, Krispy Kreme is also using placement or distribution strategy in term of distributes and sells their products to end users through retailers such as schools, sporting and social club in order to operating their business in efficient and effective ways. Furthermore, Krispy Kreme target their market at international airport, strip shopping centers along the highway, Sydney CBD, schools, sporting and social clubs in order to gain awareness and attraction of consumers in running their business in a successful ways. On the other hand, there are several strategies to overcome the issue of rising level of obesity in Australia and US such as giving trial of doughnut which are more nutrition in term of less sugar or low carbohydrate doughnut, conduct an online survey in order to improve their ingredient of doughnuts and use testimonial prove by nutritious to handle such criticism. Moreover, they also can use the strategy of product rebranding and innovation of product packaging to handle the issue of obesity. Besides that, Krispy Kreme should focus on the importance of market research when other product launches in the market. Lastly, Krispy Kreme should focus on the implications that will affect their business and be initiative in doing more market research from time-to-time in order to create awareness, customer loyalty, able to stand and to compete with competitors’ new products.
Showing posts with label Marketing. Show all posts
Showing posts with label Marketing. Show all posts
Tuesday, May 13, 2008
PETRONAS
1.0 EXECUTIVE SUMMARY
The market for petroleum products is highly competitive, with major multinational corporations especially in a mix-market country. PETRONAS markets its products directly to customers as well as through its network of service stations, LPG dealers and industrial dealers. What sets them apart are the variety of products, services, promotional strategy, product branding and image, company identity and marketing strategies. The marketing strategy that been analyzed in this assignment are Dealing with Competition, Segmentation, Targeting Strategy, and Positioning, and Marketing promotion – Integrated Marketing Communications (IMC) and Promotion Mix. In a market, there would be two different market categories: consumer markets and business markets. As for oil and gas company, PETRONAS falls into both market categories which are consumer markets and business markets. Meanwhile, PETRONAS also considered as business market which they selling their oil and gas to business companies for resale or producing another products. PETRONAS major product sale are fuels and lubricants for
2.0 INTRODUCTION
The company we have chosen to analyse is Petroliam Nasional Berhad, or more commonly known as PETRONAS. PETRONAS is an oil and gas company developed in
2.1 PETRONAS – Competitive Position
PETRONAS has a number of competitors in the oil and gas market, such as, SHELL, PROJET, BP, and ESSO. Generally, all these companies have similar products and services. What sets them apart are the variety of products, services, promotional strategy, product branding and image, company identity and marketing strategies. Currently, PETRONAS is a major player in the industrial market for oil and gas, within
With these competitions, PETRONAS looks into their marketing strategy in order to rank in more potential customers. In our report of PETRONAS’ marketing strategy, we analyze PETRONAS’ ability of:
· Dealing with competition, segmenting, targeting, and positioning strategy
· Marketing promotion – Integrated Marketing Communications (IMC)
· Marketing promotion – The Promotion Mix
3.0 ANALYSIS AND DISCUSSION
3.1 Dealing with competition; segmenting, targeting, & positioning strategies
A market is anyone with needs, capable of purchasing products or services. In a market, there would be two different market categories: consumer markets and business markets.
As for oil and gas company, PETRONAS falls into both market categories which are consumer markets and business markets. Consumer who uses oil and gas for self used purpose is classified as consumer markets for example household. Meanwhile, PETRONAS also considered as business market which they selling their oil and gas to business companies for resale or producing another products. To illustrate it, a food manufacturing needs fuel as raw material in order to operates its machineries to produce foods. According to website of Petronas Dagangan Berhad’s “About Us”, PETRONAS’s consumers for fuels are motorists, households, airlines, shipping lines, transporters, plantations, processing and manufacturing plants, power stations and commercial enterprises (2006).
PETRONAS level of market segmentation is classed into mass marketing because the petrol in Malaysia is the same price with other petrol station such as Shell or Esso. PETRONAS delivered its products throughout the country, directly to customers as well as through its network of service stations, LPG dealers and industrial dealers.
PETRONAS major product sale are fuels and lubricants for
PETRONAS can be seen as having the transition of entering differentiated strategy. Differentiated strategy defined as where an organization focuses on two or more segments where it is an expansion from concentrated strategy. The oil and gas industry for PETRONAS is vast and the market can be of both consumers and business purposes. Preparing and anticipating the competitors are one of the drives that cause he change in PETRONAS to diversity. In differentiated strategy field, PETRONAS equipped themselves against rivalry such as SHELL and ESSO in
It was fact that Competitors in the same oil and gas industries business have the same, segmenting, targeting and positioning strategies because they produce same products, which are fuels and lubricants. To deal with the competitive business environments, PETRONAS should look into other marketing strategies to strengthen their products and brand in the market. Therefore, marketing promotion is extremely essential as PETRONAS’s promotion is to create fundamental images and brands to the markets. PETRONAS had its own ideology in attempting consumers. According to an article name “Who is Master Ma?” by AdAgeChina, an advertising agency, it report that PETRONAS used ads to create buzz in mysterious campaign to captured the attention of hundreds of thousands of curious Chinese viewers (Madden 2006). Refer to appendixes …………Chinese (I put in da folder)…………………These unique types of ads determine why PETRONAS is successful marketing strategies to attract buyers in new market such as China.
3.2 Integrated Marketing Communications (IMC)
Integrated Marketing Communications (IMC) is the coordination of promotional efforts for maximum informational and persuasive impact (Pride et al. 2006, p. 379). In another definition, IMC is claim as the concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent and compelling message about the organisation and its products (Kotler et al. 2003, p. 410).
After examining the market segmenting for PETRONAS products, PETRONAS will then have to devise a promotional effort to market their products. The promotional effort depends on PETRONAS decision on how much they would want to spend.
In the diagram below, it shows IMC’s main communications elements.
Diagram 1.1 Integrated Marketing Communications (IMC) Elements
Steps in Integrated Marketing Communication (IMC)
In PETRONAS, there would be steps in ensuring IMC. Below is an example for a PETRONAS Synthium product:
- Identify Target Audience
PETRONAS has identified the target audience for their Synthium product, which is the motorcyclist. Motorcyclists are also within the age group of youths, who are seeking for motorcycling adrenalin.
- Identify Communication Objective
The main purpose for the communication objective is to inform the public, mainly the motorcyclist, about PETRONAS products. After informing the targeted audience, PETRONAS will then persuade them to purchase their product.
- Select A Message
There are different appeals that PETRONAS could aim for in order to market their Synthium. One of which for the product would be that of safety. With one of their tag line, “Safety Outdoor”, PETRONAS targets their message to safety, which is an appropriate tag line because, generally, safety is the main concern in everyone. Below is a few examples of the message PETRONAS conveys to its consumers.
(Source:
Diagram 1.1 PETRONAS “Safety Outdoors” Promotion
Diagram 1.2 PETRONAS Gas Recipes, Cooking and Safety Tips Promotion
In Diagram 1.2, PETRONAS strive to promote their products (gas), through recipes, cooking and safety tips. Teaching the public on all these skills, informally, introduces PETRONAS’ Gas and services to the potential consumers
Diagram 1.3 PETRONAS Premium Offers
Diagram 1.4 PETRONAS Patronage Rewards
- Select Media
PETRONAS has promoted their products through different media. One of which is the commonly seen newspapers. Besides newspapers, PETRONAS has venture into product placement. An example to illustrate PETRONAS’ product placement promotion would be that of a F1 car, which is widely known to anyone who is into F1 car racing.
Diagram 1.5 PETRONAS Product Placement
In Diagram 1.5, a favourite sport, such as F1 racing can be a prospect for companies, such as PETRONAS to make their name known to the world-at-large.
- Select Message Source
Selecting a message source would be promoting PETRONAS products through endorsement or through word of mouth. It can be similar to that of product placement, as the drivers of the cars are acting as PETRONAS’ endorser / ambassador.
- Obtain Feedback
Obtaining feedback is a must to ensure that a company is heading in the right direction of satisfying their customers. In PETRONAS, there will be feedback forms available to the public to provide their views on the product and services of PETRONAS.
3.3 PROMOTION MIX
Great products or services would not generate income if not properly promoted. The promotion mix of a company is the combination of different elements of promotion to create a complete package suitable to the company’s product and services. Think of it like a cake mix, the basic ingredients are always the same. However if you vary the amount of one of the ingredients, the final outcome is different. It is the same with promotions. You can 'integrate' different aspects of the promotions mix to deliver a unique campaign. PETRONAS, like any other company, has its own promotion mix. The elements include; advertising, public relations, word-of-mouth, and sales promotion. Below is the detailed discussion of each element.
Advertising
PETRONAS uses a great deal of advertising to promote its product and services. The advertising media PETRONAS applies are newspapers, television advertisements, posters, banners, and magazines. However, the most noticed and effective advertising media used by PETRONAS is television advertisements. PETRONAS’ television ads have always been unique and catchy. These ads are usually released in conjunction with major national celebrations such as the National Day, Hari Raya, Deepavali, and Chinese New Year, to name a few. These ads usually portray family, friendship, and racial values which have an emotional effect on viewers and because of the unique way in which these values are portrayed, PETRONAS ads have become a favourite to viewers.
Public Relations
Public Relations defined as 'the deliberate, planned and sustained effort to establish and maintain mutual understanding between an organization and its publics' (
Word-Of-Mouth
Word-of-mouth marketing truly is the world's best-known marketing secret. It is an unofficial technique of promoting products and services and it requires basically no cost at all. All companies have this element of marketing in their promotion mix but the difference in every company is the degree of word-of-mouth marketing being applied in their promotion mix. PETRONAS has quite a high degree of word-of-mouth marketing, due to its good public relations and different approach to advertising, consumers would inevitably talk about PETRONAS. That is what word-of-mouth is all about; customers talking about your company. The things they say may not directly promote your product but it creates awareness about your company.
4.0 CONCLUSION
Overall, PETRONAS has ventured into the oil and gas industry for quite some time (32 years) (PETRONAS 2005). With an aggressive market, PETRONAS has adapted to that environment by delivering products and services at their best ability.
5.0 RECOMMENDATION
– PETRONAS could deliver more for their products, through interactive games. These activities can be brought forth to the public, through service stations.
– Through their website, PETRONAS could have an interactive menu to educate the public about their products. This is visible through their
– PETRONAS could segment their products to different target market. In accordance to that, PETRONAS could create a specific product line, targeted to racing enthusiasts, mainly the drivers themselves. This creates in them a sense of belonging and connecting to PETRONAS on a personal level.
– In terms, of maintenance, PETRONAS should have regular maintenance of their services and products. Examples: oil pumps handles, tire pumps and their products at ‘MyMesra’ outlets.
Marketing Research : Malaysia TM company
Exclusive Summary
This report will be analyzing the telecommunication service company in Malaysia named“Telekom Malaysia (TM)”
The first part of the report will be explaining about the TM company history before the company called as TM. In this report, there are visions and mission for the TM Company to achieve their own goals. Beside that, explanation of the analysis of the company and the analysis will be separated into different categories topic, which are product, brand & services strategic strategies, dealing with the competition; segmenting, targeting & positioning strategies and the consumer buying behaviour. As the report will be based on the topic above, as the topic are related to each other, which on how the company practicing on selling its products and services to the public
1.0 Introduction
Today, Telekom Malaysia is well known around the world. Before Telekom Malaysia uses TM as their branch mark, the company name was Jabatan Telekom Malaysia (JTM). This is because JTM was a government agency, which its role is to regulate tariffs, licensing, and rates of the telecommunication industry. In 1987, JTM changed its’ name to Syarikat Telekom Malaysia due to its corporatisation and privatization (Talk Malaysia, Malaysia Telekom, 2006). After the company changes its name to Syarikat Telekom Malaysia, it also restructured the company from being a government-owned status to commercial status. After changing the company’s name, the company now focused more on telecommunications. In 2003, Celcom was being sold to Syarikat Telekom Malaysia. This is because Celcom's owner, Tan Sri Tajudin Ramli failed to resolve his debts (Wikipedia, The Free Encyclopedia, 2006). The reason why Telekom Malaysia does not use its own mobile company TM Touch after taking over Celcom is because Celcom users are much more than TM Touch users. It was said that in 1999, TM Touch users amount to 182,000, however, Celcom users amount to 643,000 (System Dynamics Group, pp. 15). In April 2005, Syarikat Telekom Malaysia officially changes its name to TM. The company now offers a huge range of telecommunication services such as fixed-line, mobile and Internet service. The reason why TM is well known around the world is because in 1996, the Menara Kuala Lumpur tower was built and recently builds Menara TM. Since then, it had been a landmark for tourist.
Other than operating telecommunication by the company in the nation, the company also involved on other services and invested other countries as well. The company involves in the field of education and also research and development to increase the welfare of the nation, for example some facilities such as Multimedia University, Multimedia College, and TM Smart School and Telekom Research and Development Sdn Bhd and Yayasan TM (Education & Research 2006). The company also invests to countries as well, such as Mobileone Limited (M1) in Singapore, PT Excelcomido Pratama (XL) in Indonesia, Cambodia Samart Communication Co. Ltd (Casacom) in Cambodia, Samart Corporation Public Company Ltd (Samart) in Thailand, TM International (Bangladesh) Limited in Bangladesh, Spice Telecom in India, Dialog Telekom Limited (Dialog) in Sri Lanka, Multinet Pakistan (Private) Limited (Multinet) in Pakistan, TM Networks Malawi Limited (TNM) in Malawi, and Societe Des Telecommunications De Guinee (Sotelgui s.a.) in Republic of Guinea.
1.1 Competitor
There are many competitors in the telecommunication service for TM Company. For the mobile communication services, the competitors for Celcom are Digi and Maxis. There is a competitor in the internet services, that’s Jaring that provide the similar services to the consumers. However, Jaring Company does not provide broadband service.
1.2 Mission & Vision
TM has been serving the nation for many years by its telecommunication service, as its vision “Our vision is to be the Communications Company of choice – focused on delivering Exceptional Value to our customers and other stakeholders.” TM also set its mission to achieve its vision and these missions are followed as below:
- Be the recognized leaders in all markets we serve.
- Be a customer-focused organization that provides one-stop total solution.
- Build enduring relationships based on trust with our customer and partners.
- Generate shareholder value by seizing opportunities in Asia Pacific and other selected regional markets.
- Be the employer of choice that inspires performance excellence.
(Vision & Mission 2006). And from the mission objective this is how the company is going to achieve its mission.
This report is going to analysis on the TM company on how the company sale its products and services to the public, from how the company segment its products and services on different group and how it’s going to promoted the products and services by analyze the consumer buying decision.
2.0 Product, brand & services strategies
TM company have a lot of services and product such as consumer telephony, mobile, internet, entertainment, card services, education and 600 info line (TM consumer 2006). The TM Company has provided the consumer telephony such as home line. Home line that divide into two, local call and the long distant call. They also provide mobile service that name as Celcom. Celcom have tow kind of service such as postpaid and prepaid communication services. There also provide the internet services that are TM net. There is much kind of services that provide by the TM net. First is the board band internet access, the Streamyx, the fast speed internet access in Malaysia. Second is the normal internet dial up, which is a normal speed internet service that for a light user. Third is the prepaid internet access, TM prepaid. The consumer can use their internet service in any place by buying the TM prepaid and not need to register for a fixed service. Last is the TM hotspot that given the coffee house or fast food center for attracting costumer that can use the wireless internet accessing in the coffee shop that have hotspot. The entertainment is the life portal and the broad portal, Blue hypoo and the broadband bluehyppo. These provide the consumers to download music, see online video, searching information about lifestyle and others. There are Card services also found in Tm Company. There are iTalk, iTalk Prepaid, Kadfon TM, Ring Ring Card, Telecard , and TM Visa. iTalk, iTalk prepaid, kadfon TM, Ring Ring card, and Telecard is all provide the telephone communication services that with different calling rate and the TM visa is let the customer to enjoy for packaging and discount on TM product and service. Beside that, TM Company has provided the education such as Multimedia University, Telekom Smart School, Multimedia College and Yaysan TM. There also a 600 info line service provide for the consumers for getting information by calling on this line. The information is providing for the customers such as education, government, religion, commercial and the general.
There are different brand that found in TM Company such as Celcom, TM net, iTalk and others, but it is targeting for different market. TM Company separates the service in to many kind of brand with different service. Celcom provide mobile communication service, TM net provide internet accessing services and others. They target in internet service, communication service, entertainment, mobile services and others. With these different brands, the customer will not mess up with the services that provide by Tm Company if they do not have different brand for different services. In the customer mind will come out for the brand when they want to choose the services.
The company has offered fixed line and mobile communication service and also provides internet service. The services in the company are mostly intangible as the service such as fixed line, mobile service, and internet service were for people to communicate to others and find information. The company is mostly in telecommunication services and also sells accessories to the customer. The company also offered other services such as education, entertainment, and info-line to the public. The services in the company are categorized in different core and supplementary services. For example, Celcom, the mobile telecommunication services have offered different product and services, and these offer are in different package such as prepaid, postpaid, and 3G to the consumer; and also these package also provide different the plans and promotion for customers. The price of the services which provide by the company are varies from one than another. The price of the services are been established to suit the need of the customer. For example, the mobile services are presented in different pricing package for customer to choose what they are needed, such as the prepaid service is offering different plans such as lite plan, mid plan, and max plan. The promotion of the services in the company are presented in many ways, for example the promotion are advertise in television and ads in internet, campaign such as carnival TV3 hosted by TMnet and other sorts of promotion can be found around the neighborhood.
3.0 Dealing with competition; segmenting, targeting & positioning strategies
TM Company appears geographic segmentation, demographic segmentation, and behavioral segmentation in market.First, geographic segmentation is dividing a market into different geographical units such as nations, regions, states, states, municipalities, cities or neighborhoods'(market segmentation - geographic segmentation 2006). The Celcom service has provided Tamil messages services (refer to the 2005 annual report p15). In Malaysia there are many different nations so Celcom provide the Tamil messages services to attract other nation costumers (Saraswathi.M 2006). The TM Company also has provided homepage to let costumers to find out much information for the services that TM provides. Nowadays, most of the citizen are busy of their own job and cannot manage to have time to get any extra information form the TM Center. TM Company has provided a Webpage for the customers to get information, advertisement in television and newspaper, or even in the mobile phone shops.
Second, demographic segmentation is dividing the market into group based on demographic variables such as age, sex, family life cycle, income, occupation, education, religion and nationality (Preid et al. 2006). The Celcom have provided postpaid n prepaid communication services (Celcom: Product & Services n.d.). The prepaid communication usually use by most of the teenager because they just need to reload as much as they need to use by buying the reload coupon. The Xpax is providing the 8pax with the user of the Xpax can enjoy a special calling or messaging for 8 persons (refer to newspaper 1). The Xpad also have provided the 8 family members with special rates for calling and messaging for those 8 members (8pax- Term and Condition n.d.) The postpaid is different than the prepaid because postpaid is providing by packages to the customer by different packages such as 100 minutes,200 minutes,300 minutes and others packages without paying any services charges(Celcom Postpaid n.d.). Some of the officers or the adult will choose to use the postpaid because all the nation call is in one rate and they not need to pay for any charges for the services. There are also have new packages for the postpaid, such as normal postpaid that simple and easy to pay as you use, family postpaid that free call for the family and the minutes postpaid with best rate and more saving (refer to newspaper 4). The consumers just need to choose the packages how many they need to use (Celcom service and product n.d.). The TMnet company has provided the Streamyx in packages (refer to appendix pg17). Different income’s consumer will choose different packages for the streamyx, such as RM20 for 10 hours, RM44 for 60 hours and RM66 for unlimited (TMNet Streamyx packages n.d.).
Last, behavioral segmentation is dividing buyers into groups based on their knowledge of the product, their attitude toward it and their responses to it. (Pried et al. 2006) The usage rate is found in Celcom because there are light, medium and heavy-user group. Most of the company like to apply the mobile service form Celcom for their employees and they provide the postpaid packing such as RM30, RM50, RM100 and following that include the services charges and provide calling time for the costumers who are heavy user or light user. For the occasion, Celcom have intro the X-pax with the FIFA World Cup 2006 that giving out the football star packages, poster, free 1000 messaging, free download for the mobile phone and others (refer to newspaper 2). Celcom also have advertised the Xpax with the movie of X-Man to attract more people to use Xpax prepaid services (refer to Advertisement 3). TM Company had separate to serve with many common needs of the communication service to the market such as fixed line services, Celcom Mobile services, TMnet services, ITalk card services, education, infoline and entertainment services.
These services are all targets to the nation and attract more customers to know their services and choose to use their services. The Celcom identifying possible competitive advantages by providing many extra services for the consumers that the others mobile company had provide such as the 8pax. Before the Celcom providing the 8pax, the Maxis and the Digi have also providing the Active5 and Friend & Family that almost same as the 8Pax but the Celcom found out and providing the same services to the consumer (refer to appendix pg).
4.0 Consumer Buying Behaviour Process in TM (Celcom)
Before a user need of buying a product or services, the users will need to know about the consumer buying behaviuor. There are five stages for the consumer buying decision-making process, problem recognition, information search, evaluation of alternatives, purchase and post purchase evaluation. Companies need to understand these five stages of consumer buying behaviour process to help the company produce or expand new products or services into the market.
First and foremost, the problem recognition occurs when the buyers notice the condition is not in the desired state, as a result creating an inspiration to achieve the goal. The user will need to think of what they want or their needs before making a decision to buy the product. From the company’s point of view, the company have to evaluate and do some research on the market needs before it produces a product or service to the users. Due to the increase in prepaid subscribers, Celcom had introduced its new and innovative prepaid package namely X-pax in December 2004 (LogicaCMG’s Next Generation prepaid solution enhances the mobile experience for Celcom's Malaysian subscribers 2005). The other reason for Celcom to introduced X-pax is because the company wants to focus on family brand. In this package, Celcom introduced the 8-pax for the users to enjoy a low rate call and messaging service for 8 selected contacts………. Another reason for Celcom to introduce X-pax is because of the 3G services (Loong.T.M. 2005).
In the second stage, information search is when a buyer search for a products’ information after they recognise their problems or needs, they will need help to decide the problem or satisfy the need. There are two aspects; internal search and external search. The internal search is when the users search their memories for information to solve their problems. On the other hand, the external search is the information that users get from communicating with their friends or family, comparing the prices and brands. To solve the problem of finding information regarding the company’s products, Celcom had set up their own website (Products and services 2006). Celcom also promote their products or services through newspapers, magazines, etc. to ensure that the users notice of their product. Other than that, the company also cooperate with some websites to promote their product, for example, www.soccernet.com, and msn messenger. Refer to appendix …
For the third stage, the users will need to make decisions by using the information that they search to evaluate the alternative brands in the choice set. In this stage, the producer/Celcom has to produce good quality service to satisfy the users so that the users will continue using their product or buy their product. In order to do so, Celcom had combine most of the services provided by Maxis and Digi. For example, Friends and Family, Active 5 and 8-pax that were meant to give the users to enjoy low call and messaging rates. Digi was the first telecommunication service that provides such service and was named Friends and Family, users can put at least 6 persons in the contact list to enjoy a low call and messaging rates (DiGi announces reduced prepaid voice and data rates for upcoming festivals 2004). Then followed up by Maxis introducing Active 5, also allow users to enjoy low call and messaging rates, however, it can only put in 5 contact numbers in the list. Lastly was Celcom namely 8-pax, however, Celcom users have the advantage of putting 8 people in the contact list to enjoy the service. This is to ensure that the users are satisfied with their product and services. Refer to Appendix …. Other than that, Celcom is one of two Telecommunication Company that provides 3G services (Wikipedia, The Free Encyclopedia, 2006). Celcom introduced this service is to offer the users a better quality services and offers a faster online coverage. These services are to ensure the satisfaction to the users.
In the fourth stage, the users choose the product to be bough. The selection is result of the evaluation stage and on other circumstances. From the company’s view point, Celcom had to set up reasonable price for their product/services so that the company can compete with Maxis and Digi. To ensure that the company make profit from their product, Celcom are now selling its starter pack via AirAsia in-flight sales as well as at Celcom Service Centre in KLIA. Celcom sells its starter pack at a price of RM 4.99 (Products and services, new promotions 2006). Comparison between Maxis and Digi, Celcom is selling its starter pack at a very low price (Telecommunication-neutral, Alive and kicking 2006). Refer to Appendix ………………………………...
Lastly, the post purchase evaluation is that the users of the product evaluate the product or take further action based on their satisfaction and dissatisfaction. To let the users give feedback on their product or services, the company provide feedback form for the users; this is to ensure that the users give feedback from what they had used. By providing the feedback form, the company can improve their product from the users’ feedback of their products and services. Refer to Appendix ….Whenever the users have any enquiries or problems, they can call to the customer service to seek advice or help. Other than that, Celcom also provide customer centre for the users to pay their bills, ask for information, subscribes for a postpaid package.
The most important stage in the consumer buying process is the Information search. This is because before a user purchases any of the starter packs, a user has to think of what type of services they want, or the type of services they need. If a user who buy a mobile phone with 3G functions, he or she will consider more on buying those telecommunication company that provide 3G services, for example Celcom and Maxis. The user will also need to think whether they call frequently or just to have a mobile phone to contact others when there is an emergency. This can help the users to choose which company’s starter pack they will buy. Overall, Celcom is providing the users the best quality service to keep their existing customers and to attract other mobile users.
5.0 Recommendation
1st Product, Brand & services strategies recommendation:
2nd Dealing with competition; segmenting, targeting & positioning strategies recommendation:
About the segmentation, the Celcom and TMNet Company have done their best to attract more consumers to use their own services. The problem for the Celcom is that they always provide the extra services or promote their product slowly than their competitor. So they should target more other customer to use their services by providing new extra services or giving a special rate to the user.
3rd Consumer Buying Behaviour recommendation:
6.0 Conclusion
Telekom Malaysia is a vast telecommunication service company. With its variety of products and services, the company has been progressing greatly to meet its vision.
This report will be analyzing the telecommunication service company in Malaysia named“Telekom Malaysia (TM)”
The first part of the report will be explaining about the TM company history before the company called as TM. In this report, there are visions and mission for the TM Company to achieve their own goals. Beside that, explanation of the analysis of the company and the analysis will be separated into different categories topic, which are product, brand & services strategic strategies, dealing with the competition; segmenting, targeting & positioning strategies and the consumer buying behaviour. As the report will be based on the topic above, as the topic are related to each other, which on how the company practicing on selling its products and services to the public
1.0 Introduction
Today, Telekom Malaysia is well known around the world. Before Telekom Malaysia uses TM as their branch mark, the company name was Jabatan Telekom Malaysia (JTM). This is because JTM was a government agency, which its role is to regulate tariffs, licensing, and rates of the telecommunication industry. In 1987, JTM changed its’ name to Syarikat Telekom Malaysia due to its corporatisation and privatization (Talk Malaysia, Malaysia Telekom, 2006). After the company changes its name to Syarikat Telekom Malaysia, it also restructured the company from being a government-owned status to commercial status. After changing the company’s name, the company now focused more on telecommunications. In 2003, Celcom was being sold to Syarikat Telekom Malaysia. This is because Celcom's owner, Tan Sri Tajudin Ramli failed to resolve his debts (Wikipedia, The Free Encyclopedia, 2006). The reason why Telekom Malaysia does not use its own mobile company TM Touch after taking over Celcom is because Celcom users are much more than TM Touch users. It was said that in 1999, TM Touch users amount to 182,000, however, Celcom users amount to 643,000 (System Dynamics Group, pp. 15). In April 2005, Syarikat Telekom Malaysia officially changes its name to TM. The company now offers a huge range of telecommunication services such as fixed-line, mobile and Internet service. The reason why TM is well known around the world is because in 1996, the Menara Kuala Lumpur tower was built and recently builds Menara TM. Since then, it had been a landmark for tourist.
Other than operating telecommunication by the company in the nation, the company also involved on other services and invested other countries as well. The company involves in the field of education and also research and development to increase the welfare of the nation, for example some facilities such as Multimedia University, Multimedia College, and TM Smart School and Telekom Research and Development Sdn Bhd and Yayasan TM (Education & Research 2006). The company also invests to countries as well, such as Mobileone Limited (M1) in Singapore, PT Excelcomido Pratama (XL) in Indonesia, Cambodia Samart Communication Co. Ltd (Casacom) in Cambodia, Samart Corporation Public Company Ltd (Samart) in Thailand, TM International (Bangladesh) Limited in Bangladesh, Spice Telecom in India, Dialog Telekom Limited (Dialog) in Sri Lanka, Multinet Pakistan (Private) Limited (Multinet) in Pakistan, TM Networks Malawi Limited (TNM) in Malawi, and Societe Des Telecommunications De Guinee (Sotelgui s.a.) in Republic of Guinea.
1.1 Competitor
There are many competitors in the telecommunication service for TM Company. For the mobile communication services, the competitors for Celcom are Digi and Maxis. There is a competitor in the internet services, that’s Jaring that provide the similar services to the consumers. However, Jaring Company does not provide broadband service.
1.2 Mission & Vision
TM has been serving the nation for many years by its telecommunication service, as its vision “Our vision is to be the Communications Company of choice – focused on delivering Exceptional Value to our customers and other stakeholders.” TM also set its mission to achieve its vision and these missions are followed as below:
- Be the recognized leaders in all markets we serve.
- Be a customer-focused organization that provides one-stop total solution.
- Build enduring relationships based on trust with our customer and partners.
- Generate shareholder value by seizing opportunities in Asia Pacific and other selected regional markets.
- Be the employer of choice that inspires performance excellence.
(Vision & Mission 2006). And from the mission objective this is how the company is going to achieve its mission.
This report is going to analysis on the TM company on how the company sale its products and services to the public, from how the company segment its products and services on different group and how it’s going to promoted the products and services by analyze the consumer buying decision.
2.0 Product, brand & services strategies
TM company have a lot of services and product such as consumer telephony, mobile, internet, entertainment, card services, education and 600 info line (TM consumer 2006). The TM Company has provided the consumer telephony such as home line. Home line that divide into two, local call and the long distant call. They also provide mobile service that name as Celcom. Celcom have tow kind of service such as postpaid and prepaid communication services. There also provide the internet services that are TM net. There is much kind of services that provide by the TM net. First is the board band internet access, the Streamyx, the fast speed internet access in Malaysia. Second is the normal internet dial up, which is a normal speed internet service that for a light user. Third is the prepaid internet access, TM prepaid. The consumer can use their internet service in any place by buying the TM prepaid and not need to register for a fixed service. Last is the TM hotspot that given the coffee house or fast food center for attracting costumer that can use the wireless internet accessing in the coffee shop that have hotspot. The entertainment is the life portal and the broad portal, Blue hypoo and the broadband bluehyppo. These provide the consumers to download music, see online video, searching information about lifestyle and others. There are Card services also found in Tm Company. There are iTalk, iTalk Prepaid, Kadfon TM, Ring Ring Card, Telecard , and TM Visa. iTalk, iTalk prepaid, kadfon TM, Ring Ring card, and Telecard is all provide the telephone communication services that with different calling rate and the TM visa is let the customer to enjoy for packaging and discount on TM product and service. Beside that, TM Company has provided the education such as Multimedia University, Telekom Smart School, Multimedia College and Yaysan TM. There also a 600 info line service provide for the consumers for getting information by calling on this line. The information is providing for the customers such as education, government, religion, commercial and the general.
There are different brand that found in TM Company such as Celcom, TM net, iTalk and others, but it is targeting for different market. TM Company separates the service in to many kind of brand with different service. Celcom provide mobile communication service, TM net provide internet accessing services and others. They target in internet service, communication service, entertainment, mobile services and others. With these different brands, the customer will not mess up with the services that provide by Tm Company if they do not have different brand for different services. In the customer mind will come out for the brand when they want to choose the services.
The company has offered fixed line and mobile communication service and also provides internet service. The services in the company are mostly intangible as the service such as fixed line, mobile service, and internet service were for people to communicate to others and find information. The company is mostly in telecommunication services and also sells accessories to the customer. The company also offered other services such as education, entertainment, and info-line to the public. The services in the company are categorized in different core and supplementary services. For example, Celcom, the mobile telecommunication services have offered different product and services, and these offer are in different package such as prepaid, postpaid, and 3G to the consumer; and also these package also provide different the plans and promotion for customers. The price of the services which provide by the company are varies from one than another. The price of the services are been established to suit the need of the customer. For example, the mobile services are presented in different pricing package for customer to choose what they are needed, such as the prepaid service is offering different plans such as lite plan, mid plan, and max plan. The promotion of the services in the company are presented in many ways, for example the promotion are advertise in television and ads in internet, campaign such as carnival TV3 hosted by TMnet and other sorts of promotion can be found around the neighborhood.
3.0 Dealing with competition; segmenting, targeting & positioning strategies
TM Company appears geographic segmentation, demographic segmentation, and behavioral segmentation in market.First, geographic segmentation is dividing a market into different geographical units such as nations, regions, states, states, municipalities, cities or neighborhoods'(market segmentation - geographic segmentation 2006). The Celcom service has provided Tamil messages services (refer to the 2005 annual report p15). In Malaysia there are many different nations so Celcom provide the Tamil messages services to attract other nation costumers (Saraswathi.M 2006). The TM Company also has provided homepage to let costumers to find out much information for the services that TM provides. Nowadays, most of the citizen are busy of their own job and cannot manage to have time to get any extra information form the TM Center. TM Company has provided a Webpage for the customers to get information, advertisement in television and newspaper, or even in the mobile phone shops.
Second, demographic segmentation is dividing the market into group based on demographic variables such as age, sex, family life cycle, income, occupation, education, religion and nationality (Preid et al. 2006). The Celcom have provided postpaid n prepaid communication services (Celcom: Product & Services n.d.). The prepaid communication usually use by most of the teenager because they just need to reload as much as they need to use by buying the reload coupon. The Xpax is providing the 8pax with the user of the Xpax can enjoy a special calling or messaging for 8 persons (refer to newspaper 1). The Xpad also have provided the 8 family members with special rates for calling and messaging for those 8 members (8pax- Term and Condition n.d.) The postpaid is different than the prepaid because postpaid is providing by packages to the customer by different packages such as 100 minutes,200 minutes,300 minutes and others packages without paying any services charges(Celcom Postpaid n.d.). Some of the officers or the adult will choose to use the postpaid because all the nation call is in one rate and they not need to pay for any charges for the services. There are also have new packages for the postpaid, such as normal postpaid that simple and easy to pay as you use, family postpaid that free call for the family and the minutes postpaid with best rate and more saving (refer to newspaper 4). The consumers just need to choose the packages how many they need to use (Celcom service and product n.d.). The TMnet company has provided the Streamyx in packages (refer to appendix pg17). Different income’s consumer will choose different packages for the streamyx, such as RM20 for 10 hours, RM44 for 60 hours and RM66 for unlimited (TMNet Streamyx packages n.d.).
Last, behavioral segmentation is dividing buyers into groups based on their knowledge of the product, their attitude toward it and their responses to it. (Pried et al. 2006) The usage rate is found in Celcom because there are light, medium and heavy-user group. Most of the company like to apply the mobile service form Celcom for their employees and they provide the postpaid packing such as RM30, RM50, RM100 and following that include the services charges and provide calling time for the costumers who are heavy user or light user. For the occasion, Celcom have intro the X-pax with the FIFA World Cup 2006 that giving out the football star packages, poster, free 1000 messaging, free download for the mobile phone and others (refer to newspaper 2). Celcom also have advertised the Xpax with the movie of X-Man to attract more people to use Xpax prepaid services (refer to Advertisement 3). TM Company had separate to serve with many common needs of the communication service to the market such as fixed line services, Celcom Mobile services, TMnet services, ITalk card services, education, infoline and entertainment services.
These services are all targets to the nation and attract more customers to know their services and choose to use their services. The Celcom identifying possible competitive advantages by providing many extra services for the consumers that the others mobile company had provide such as the 8pax. Before the Celcom providing the 8pax, the Maxis and the Digi have also providing the Active5 and Friend & Family that almost same as the 8Pax but the Celcom found out and providing the same services to the consumer (refer to appendix pg).
4.0 Consumer Buying Behaviour Process in TM (Celcom)
Before a user need of buying a product or services, the users will need to know about the consumer buying behaviuor. There are five stages for the consumer buying decision-making process, problem recognition, information search, evaluation of alternatives, purchase and post purchase evaluation. Companies need to understand these five stages of consumer buying behaviour process to help the company produce or expand new products or services into the market.
First and foremost, the problem recognition occurs when the buyers notice the condition is not in the desired state, as a result creating an inspiration to achieve the goal. The user will need to think of what they want or their needs before making a decision to buy the product. From the company’s point of view, the company have to evaluate and do some research on the market needs before it produces a product or service to the users. Due to the increase in prepaid subscribers, Celcom had introduced its new and innovative prepaid package namely X-pax in December 2004 (LogicaCMG’s Next Generation prepaid solution enhances the mobile experience for Celcom's Malaysian subscribers 2005). The other reason for Celcom to introduced X-pax is because the company wants to focus on family brand. In this package, Celcom introduced the 8-pax for the users to enjoy a low rate call and messaging service for 8 selected contacts………. Another reason for Celcom to introduce X-pax is because of the 3G services (Loong.T.M. 2005).
In the second stage, information search is when a buyer search for a products’ information after they recognise their problems or needs, they will need help to decide the problem or satisfy the need. There are two aspects; internal search and external search. The internal search is when the users search their memories for information to solve their problems. On the other hand, the external search is the information that users get from communicating with their friends or family, comparing the prices and brands. To solve the problem of finding information regarding the company’s products, Celcom had set up their own website (Products and services 2006). Celcom also promote their products or services through newspapers, magazines, etc. to ensure that the users notice of their product. Other than that, the company also cooperate with some websites to promote their product, for example, www.soccernet.com, and msn messenger. Refer to appendix …
For the third stage, the users will need to make decisions by using the information that they search to evaluate the alternative brands in the choice set. In this stage, the producer/Celcom has to produce good quality service to satisfy the users so that the users will continue using their product or buy their product. In order to do so, Celcom had combine most of the services provided by Maxis and Digi. For example, Friends and Family, Active 5 and 8-pax that were meant to give the users to enjoy low call and messaging rates. Digi was the first telecommunication service that provides such service and was named Friends and Family, users can put at least 6 persons in the contact list to enjoy a low call and messaging rates (DiGi announces reduced prepaid voice and data rates for upcoming festivals 2004). Then followed up by Maxis introducing Active 5, also allow users to enjoy low call and messaging rates, however, it can only put in 5 contact numbers in the list. Lastly was Celcom namely 8-pax, however, Celcom users have the advantage of putting 8 people in the contact list to enjoy the service. This is to ensure that the users are satisfied with their product and services. Refer to Appendix …. Other than that, Celcom is one of two Telecommunication Company that provides 3G services (Wikipedia, The Free Encyclopedia, 2006). Celcom introduced this service is to offer the users a better quality services and offers a faster online coverage. These services are to ensure the satisfaction to the users.
In the fourth stage, the users choose the product to be bough. The selection is result of the evaluation stage and on other circumstances. From the company’s view point, Celcom had to set up reasonable price for their product/services so that the company can compete with Maxis and Digi. To ensure that the company make profit from their product, Celcom are now selling its starter pack via AirAsia in-flight sales as well as at Celcom Service Centre in KLIA. Celcom sells its starter pack at a price of RM 4.99 (Products and services, new promotions 2006). Comparison between Maxis and Digi, Celcom is selling its starter pack at a very low price (Telecommunication-neutral, Alive and kicking 2006). Refer to Appendix ………………………………...
Lastly, the post purchase evaluation is that the users of the product evaluate the product or take further action based on their satisfaction and dissatisfaction. To let the users give feedback on their product or services, the company provide feedback form for the users; this is to ensure that the users give feedback from what they had used. By providing the feedback form, the company can improve their product from the users’ feedback of their products and services. Refer to Appendix ….Whenever the users have any enquiries or problems, they can call to the customer service to seek advice or help. Other than that, Celcom also provide customer centre for the users to pay their bills, ask for information, subscribes for a postpaid package.
The most important stage in the consumer buying process is the Information search. This is because before a user purchases any of the starter packs, a user has to think of what type of services they want, or the type of services they need. If a user who buy a mobile phone with 3G functions, he or she will consider more on buying those telecommunication company that provide 3G services, for example Celcom and Maxis. The user will also need to think whether they call frequently or just to have a mobile phone to contact others when there is an emergency. This can help the users to choose which company’s starter pack they will buy. Overall, Celcom is providing the users the best quality service to keep their existing customers and to attract other mobile users.
5.0 Recommendation
1st Product, Brand & services strategies recommendation:
2nd Dealing with competition; segmenting, targeting & positioning strategies recommendation:
About the segmentation, the Celcom and TMNet Company have done their best to attract more consumers to use their own services. The problem for the Celcom is that they always provide the extra services or promote their product slowly than their competitor. So they should target more other customer to use their services by providing new extra services or giving a special rate to the user.
3rd Consumer Buying Behaviour recommendation:
6.0 Conclusion
Telekom Malaysia is a vast telecommunication service company. With its variety of products and services, the company has been progressing greatly to meet its vision.
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