Media noise give room for more mobile suppliers

The players in the mobile market are increasingly in a situation where the neeed to work seriously with customer and market segmenting. This due to the fact that the mobile market in the last 5-10 years have increasingly become fragmented

The reason why segmentation is becoming increasingly more relevant for mobile providers is among other things due to:

• Mobile customers are far from homogeneous
• The costs of offering mobile telephony are decreasing significantly, making it possible to offer mobile telephony to much smaller segments

Choosing customer segments is about gaining knowledge of different customer segments, enabling a mobile provider to develop different segmented mobile products.

The justification of existence and the foundation for success for a mobile provider without their own network, lies in finding niche segments on the mobile markets and tailor making relevant mobile products targeted at these niche segments. On the other hand the MNOs want to cover the whole market and have a wide selection of mobile products targeting the large segments of the mobile market.

Choosing customer segments are about acquiring knwoledge about the different customer segments, this makes the mobile providers able to develop different mobile products, targeted at specific customer segments.

Developing the correct mobile products for the correct mobile customers will help reduce “media noise” that is currently characterising the mobile markets. Customers are being bombarded with marketing from a great number of players on the mobile markets and a customer looking for a new mobile handset and/or a new mobile subscription are being influenced by the handset manufacturers, the MNOs and the retail sector. Additionally, television advertisements and print advertisements in newspapers and magazines etc are also influencing people who are currently not contemplating purchasing a mobile handset or subscription and finally this marketing is not decreasing, as an increasing number of players are entering the mobile market (MNOs, SPs, MVNOs etc).

In a market with such a high level of media noise, the better the mobile provider knows their customer segments, the larger advantage they will have. This type of knowledge will make it clear how marketing can be optimised towards this customer segment. This could for example be “sub-branding”, where a brand is targeted towards a certain segment. This type of “sub-brand” will have a special appeal to certain customers, and thereby hopefully let the “sub-brand” marketing cut through the media noise, getting the message through to the target segment of the “sub-brand”.

Historically, most mobile providers have used a “one size fits all” strategy, but the decreasing costs of offering mobile telephony have resulted in different mobile providers changing strategy, as the figure below illustrates.

For more information about segmentating we refer you to out newest report – How to get success in the second generation MVNO market – in which we analyse the different mobile providers choice of customer segement. The report examines the main challenges facing mobile industry players of all varieties and helps companies develop appropriate strategies for success.

How to get success in the second Generation MVNO Market