Marketing plan for AT&T, Inc. Mobile Money Transfer - Coursework Example

Executive Summary

The use of internet based money transfer and payment system has dominated United States market for quite some time. For example, people may load money to PayPal accounts, Payoneer accounts, use credit cards or debit cards to make online payments. Even though these methods of money transfer may be convenient, they are vulnerable to cyber-attacks thus customers (user) risk losing their money. The proposed AT & T Mobile Money Transfer (ATTMMT) solves this problem. It allows users send and receive money, pay bills, buy goods and services, and so on using their mobile phones without actually connecting to internet. The service uses the simcard-based USSD platform to carry out cash transactions hence it will be hard for internet hackers to steal customer data through malicious applications. Implementing the proposed by AT & T, Inc. will increase the company’s earnings thus increasing its profit margin and hence improving its competiveness. The projected revenue after just three years of ATTMMT operation will be close $ 1.8 billion.

Company Overview

AT & T Inc. is an American international telecommunications company whose headquarter is located in Dallas, Texas in United States of America. It was incorporated in 1983 as a holding company. The company offers digital entertainment and communication services in a number of countries such as Mexico, United States of America and Latin America. Its operations are divided into four main segments, namely: Consumer Mobility, Entertainment Group, Business Solutions, and International. The services currently offered by the company include: internet and data (broadband) services, wireless communication services, telephone services, digital video services, telecommunication equipment and services, and networking services.

Situational (SWOT) analysis

Strengths

AT & T, Inc. has the following strengths: it is one of the largest telecommunications companies in United States of America, and it is a very strong brand. As one of the largest telecommunications in US, the Company has already established itself as leader in the electronic and communication equipment market. As strong brand, AT & T has a very good reputation. The company has really worked hard to build the good reputation in the regions where it operates. Hence company can use this reputation to introduce new products into the market.

Weaknesses

Large market size: the market that is targeted by the company is large. As of 2015, the company had approximately 11.5 million prepaid customers and approximately 77.1 million postpaid customers. These numbers are huge, and there are fears that the demand for company’s services and goods may outstrip supply. Also when the target market is large, the quality of services offered by the company may be low when compared to that of rival companies.

Investing in non-competitive businesses: AT & T, Inc. has continued to invest in television business regardless of the fact that the use of television as a medium of entertainment in US is slowly being replaced by internet video such as YouTube and Netflix. The current generation (Generation Y and Z) is turning to internet videos for visual entertainment.

Opportunities

Diversification: the company should diversify its operations in popular and profitable businesses. For example, the company is holding on television business yet the business is not popular today. Diversification to other types of entertainment services such as YouTube, Netflix or similar would help the company keep up to date with current trends and popularity.

Provision of mobile money transfer: the use of mobile platform (USSD) to carry out cash transaction (sending and receiving money, paying bills, buying of goods and services, and so on) has been successful in some countries such as United Kingdom, South Africa, India, Kenya, and Tanzania. This is a new venture that may be successful in US if implemented correctly.

Threats

Reduction of market share: Due to the big customer base, the quality of services that may be offered by the company may low when compared that of the competitors as earlier stated. This means that the company may lose some of its customers to rival companies such as T-Mobile.

Competition from viral companies: AT & T is faced with intense competition from the rival companies such as T-Mobile and Sprint. It is estimated that close to 2 million AT & T customers are switching to rival companies yearly.

Competitive analysis

The competitor analysis is shown in the table below.

Table 1: Competitor comparative chart

Company

Number of Subscribers

2016 Q 2 service revenue

Strength of brand name

AT & T

131.8 million

14.9 billion

Very strong

T-Mobile

67.3 million

6.9 billion

strong

Sprint

5 million

5.9 billion

Relatively strong

Verizon Wireless

142.8 million

16.7 billion

Very strong

From the above chart (table), it is seen that AT & T is a very strong competitor in the US telecommunications industry. It is only rivaled with Verizon Wireless.

Market plan goals and objectives

As earlier stated, the use of mobile phone to carry out money transactions has been successful in a number of countries. This service enables mobile phone subscribers to send and receive money, pay bills, buy goods and services, and so on without actually connecting to internet. The service uses the sim-based USSD (Unstructured Supplementary Service Data, also known as Quick codes) platform to carry out these cash transactions.

Even though people can successfully carry out above transactions successfully in the US at the comfort of their couches thanks to the internet technology, these internet based systems are not secured. They can be hacked. Some malicious applications may be sent by hackers to users’ internet based devices (computers and smart phones) to read their passwords and usernames. Hence people may lose money while trying to make such transactions. The mobile money transfer on the other hand does not require internet, it uses the USSD codes. This means that threats as a result of hacking may be avoided at the user level.

Target market and STDP Segmentation

Definition

The meaning of STDP in full is Market Segmentation, Targeting, Differentiation and Positioning . Market segmentation is generally the division of target market according to the needs, behaviors and characters of buyers of a service or a product. Therefore, a segment is a group of buyers (consumers) whose demands are affected by same factors. Market is usually segmented in order for the seller to understand the needs of its customers. Usually market segmentation is done based on the following criteria.

• Demographics: Segmentation is done based on age, gender, income, religion, race, occupation, nationality, and so on.
• Behavioral: Segmentation is done based on occasions such as Christmas, Valentine’s Day, customer loyalty, and so on
• Geographic: Segmentation is done based on geographical area such as states, regions, nations or cities.
• Psycho-graphic segmentation: In this case segmentation is done based on lifestyle, social class, personalities, socio economic values, and so on.

AT & T Mobile money transfer target market and STDP Segmentation

Target market and Segmentation

The market targeted by the above proposed mobile money transfer is segmented as follows:

• Adult mobile phone subscribers: Mobile phone subscribers with Identification documents such drivers’ license, American passport, visa, military identification document, and so on.
• Service providers such as electricity providers, water companies, gas suppliers, cable television companies, internet providers, hospitals and, so on.
• Financial Institutions such as banks: To enable people make bank transactions at the comfort of homes or offices.
• Tax collection agency.

Targeting

This is one of the most important aspects of marketing plan preparation as it evaluates each of the proposed segments in terms of their attractiveness, and selecting the most appropriate segment.

Of the four proposed market segments, the most appropriate are: adult AT & T subscribers and service providers. Stating that these are most appropriate doesn’t mean that the rest of the market segments are irrelevant. Since this is a new service, its acceptance by the subscribers needs to be evaluated before it is eventually rolled to the other segments.

Market Size

AT & T, has a subscriber base of close to 137 million subscribers; these will be the first target market and hence the initial market size. If successful, the service will be expanded to allow the users enjoy more services associated with the USSD mobile money transfer such as bank services, and payment of taxes. The service may also be rolled out to serve the entire American adult population.

Marketing Strategy and Positioning

Market Mix

For this proposed service to be successful it must be put at the right place, at the right time, and at the right price. This calls for the marketing mix which involves 4Ps (Product, Price, Place, and Promotion). The marketing mix for the proposed mobile money transfer is as follows.

Product

The proposed product is mobile money transfer in which subscribers will send and receive money, pay bills, buy goods and services, and so on using their mobile phones without actually connecting to internet. The proposed name of the product is AT & T Mobile Money Transfer (ATTMMT). Just as earlier stated, the service uses the sim-based USSD (Unstructured Supplementary Service Data, also known as Quick codes) platform to carry out these cash transactions hence it will be hard for internet hackers to steal customer data through malicious applications. The proposed immediate customers for the service are the AT & T mobile subscribers (both postpaid and prepaid customers).

Price

Since there is no new major infrastructure that will be built, the price of the product (commissions earned during money transfer transactions) are expected to be low. It is therefore, proposed that commission charged during transactions be lower than that charged by banks and other online money transfer companies. This means that the proposed service will compete with the available online and bank money transfer services.

Promotion

Any new product need to be known that it exists by the targeted customers. Since AT & T is Telecommunication Company, the cheapest and sure way of the information reaching its subscribers is via short message service (SMS). The other proposed media of promotion include: Televisions adverts, YouTube adverts, Facebook adverts, billboards, advertising in the company’s website and so on.

Place

Any new product need to be useful to the consumers, it must reach them through chains of distribution. Since this service will available in the subscribers’ mobile phones, it will be readily available for them hence no need for distribution channel. However, money needs to loaded into the mobile phones or withdrawn from the phones. In this case is proposed that AT & T will establish its own agents throughout the country or use existing institutions such as banks, gas stations, convenient stores, supermarkets, food chains, and so on as its agents.

Marketing Research

Competition

The industry in which AT & T, Inc. operates is very competitive; from telecommunications to Television business. Competitors such as T-Mobile, Verizon Wireless and Sprint, compete for subscribers with AT & T. It is estimated that close to 2 million AT & T customers are switching to rival companies monthly. Therefore, provision of the ATTMMT services will give the company a competitive edge over competitors since it will be first company in the US to offer the proposed services.

Legal factors

The proposed service will abide by all laws and legal provisions guiding money transfer issues in the United States of America.

Corporate social responsibility

The proposed service will be riding on already existing AT & T infrastructure hence negative environmental effects will be avoided. In addition, AT & T shall ensure that activities associated with the proposed service will help improve the well-being of the society and stakeholders. If successful, the company may introduce ATTMMT foundation which will be offering a number community services such as offering scholarships to the poor, building schools, health centers, among other services.

Proposed marketing research methodology

In order to understand the above discussed factors, it proposed both experimental and non-experimental methods be used. Experimental methods will involve carrying out interviews on subscribers’ opinions on the proposed services. The non-experimental method will involve observing the current trends and make conclusions based on the observed trends.

Financial Projections

These financial projections are based on assumption that 30%, 50% and 80% of subscribers will be using the proposed service during first, second and third years of operation. It is also assumed that each subscriber will be carrying out 1 transaction per week which translates to four transactions per week. Also assuming that each transaction will earn an average of $ 0.5 commission. The projected earnings will be as indicated in the table below:

Table 2: Projected Revenue

Year 1

Year 2

Year 3

Subscribers

Revenue ($)

Subscribers

Revenue ($)

Subscribers

Revenue ($)

27 million

648 million

45 million

2.16 billion

72 million

1.728 billion

Table 3: Projected expense on advertising and promotion

Year 1

Year 2

Year 3

Expense, $

Expense, $

Expense, $

500 million

500 million

300 million

Product life cycle

Table 4: The proposed product life cycle is shown in the table below

Product activity

Timeframe

Introduction

First to second year

Growth

Third to Fourth year

Maturity

Fourth year to fifteenth year

Decline

After fifteenth year

Extension

Maybe extended at fifteenth year if the product is still profitable.

Implementation plan

The proposed implementation plan for the proposed AT & T Mobile Money Transfer is shown in the table 5 below.

Table 5: The proposed implantation plan

Activity

Start date

Finish date

Comments

Service development

Immediately

Will involve development of computer programs that will handle the USSD codes send by the mobile phones. It will be improved continuously

Testing

After development

The developed computer program will be tested to ensure it works flawlessly.

Rolling out and Launching

After testing

The product will be launched and interested customers will be registered.

Advertising and Promotion

Starts immediately after product is launched

Continues throughout the life of the product

Intensive adverting through television, radios, social media, YouTube, company website, print media, and son

Control and Monitoring

In order to evaluate the preformation of the proposed service (ATTMMT) the following evaluation procedures are proposed.

• A project management team to be formed. The team will be tasked with ensuring that all activities associated with the proposed project are implemented within the required time, on budget and to the required quality.
• Comparison of the actual project result and the projected result. Any deviation will be detected and corrective actions taken on time. Success will be achieved if actual result is close or equal or exceeds the projected result.

Conclusion

The current online mobile money transfers offered by a number of providers use internet which make them vulnerable to cyber-attacks thus putting customers’ monies at risk. The proposed AT & T Mobile Money Transfer (ATTMMT) in which subscribers will send and receive money, pay bills, buy goods and services, and so on using their mobile phones without actually connecting to internet will solve the problem of cyber-attack. The service uses the simcard-based USSD platform to carry out cash transactions hence it will be hard for internet hackers to steal customer data through malicious applications.