Research Notes

The answer to many of the worries of the Mobile Operators is at the local supermarket!

Most of us have experienced being in a larger supermarket and unable to find what we are looking for. So we ask a guy filling some shelves with a product and get the surprising answer “I don’t know – I don’t work here”!! This man is not a compulsive liar and we are not on Candid Camera – the truth is he does not work in that supermarket, he works for the company who supplies the product he is putting on the shelves and when those shelves are full, he will drive on to the next supermarket and fill shelves there.

Today, most larger supermarkets are complex businesses. They have all sorts of agreements with suppliers. Some suppliers have shelf space in the supermarket that they look after themselves – like the example above – and where the supermarket does not have to buy the products themselves, but sell the products on a sort of “commission” basis. Some products are priced so low that the supermarket does not make money on them, but want to use the special offers to attract their target customers – that they then know will buy a lot of other products once inside the supermarket. How the supermarket is designed, where different categories of products are placed and the customer flow through the supermarket is a science in itself, as we all know if we are just popping in to get some milk!

Although the supermarket is a very well known brand in itself, nationally known brands of foods and household goods market their brands inside the supermarket and makes deals for how much space and which placement they can get inside. At the same time the supermarket and brand name goods will co-market in advertising campaigns, both to stimulate customer loyalty to the supermarket and brand of good, but also to attract new customers, in the hope that they will like the supermarket and continue to shop there in the future. A lot of thought and work goes in to differentiating different supermarket brands, based on a lot of different parameters like: range of goods, quality of service, price of goods, specialised departments, quality of goods, interior design of supermarket, ease of use, speed of use and so on.

The mobile operators would like to over 30% of their revenue come from mobile services in the coming years. For this to happen the mobile consumers need to switch to new mobile phones that can handle the new mobile technologies – something the consumers will be more willing to do if there were a wide variety of new mobile services. These new services need to be developed, something the content owners, service creators and service providers will not do until the business models and revenue sharing models are up and running. In other words, the mobile operators will have to have a much more clearly defined strategy for the future – if they want to achieve success.

As part of that strategy, taking a much closer look at how supermarkets conduct business could be well worth their while for the mobile operators. They don’t have to physically open a supermarket like shop – just look at how the business works and how they can adapt the business models to the mobile world. There is no doubt that the mobile operators can quite easily adapt many of the business practices from the supermarket sector and incorporate them into the mobile business, both in the services creation and marketing and sales of mobile services, thereby attracting both the mobile customers and the content owners and service creators. In this way the mobile operator will have the right content and services available, that fit in with their strategies and thereby target the customer segments they want – and at the same time – each mobile operator can differentiate themselves from the other mobile operators.

It is not like mobile services have to start from scratch. According to Strand Consults latest report “How to make money on mobile services” Facts & Figures, in 2002 premium mobile services in Europe generated 1.6 billion Euro in revenue that was shared between the mobile operators and the service providers and content owners. Of course, over 74% of this revenue came from SMS services, a figure that will drop to only 7% in 2005 – when the total revenue from mobile services will have risen to over 22.7 billion Euro! “How to make money on mobile services” Facts & Figures – is a comprehensive report about the development and value of all types of mobile services in 16 mobile markets in Europe from 2002 to 2005. The mobile services are split into type of service, network technology, service technology, country and many more elements – giving a very clear picture country by country as to which types of services will have the most success on the different platforms and when it will happen. This report was compiled as part of the work on the primary report “How to make money on mobile services” a picture of the current & future Market for Mobile Services in Europe.

Just opening an empty supermarket and inviting all content owners and service creators to come in and fill up the shelves with mobile service products is not the answer – even though that is exactly what a couple of European mobile operators have just started doing! Like the real supermarkets, the mobile operators will first have to decide exactly what types of products and services they would like to attract customers, which products and services are core to the profile and brand of the operator and need to be most attractively placed – and so on. As part of their work on that strategy, perhaps they should buy some consulting from a supermarket.
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