Marketing Strategy
Essay Preview: Marketing Strategy
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3.0 Marketing Strategy
The following sub-topics cover the marketing strategy for OSS Telecom Technology.
3.1 Mission
Our mission is to be the provider of high value, high quality, convergent OSS solutions to telecom operators worldwide. These scalable solutions will have unparalleled support to ensure flexibility and to meet and exceed customer expectations.
3.2 Target Markets
OSS Telecom Technology has projected two primary products in its forecast:
Post-paid CCB systems The total available market for CCB systems worldwide is projected to be $6.9 billion per year in 2004. The measurement of total available market is the compilation of the number of telecom operators that will replace their billing system and the number of new billing systems coming online each year. Fifty percent of all billing systems are replaced on average every four years. With over 3,500 Tier 2 and Tier 3 telephone operators currently in operation, and a projected 1,500 new Tier 2 and Tier 3 operators coming online over five years, this means that over 4,300 billing systems will be needed in the next five years.
The post-paid CCB systems will be sold to the number of Tier 2 and Tier 3 operators listed above, specifically, new operators and those that are choosing to replace their current system. Prepaid IN systems have a much broader market opportunity given the small penetration of Prepaid IN in Tier 2 and 3 providers. Operators in developing countries project that over 50% of all calls will eventually be prepaid, while developed countries may reach 35%. This growth, coupled with the fact Prepaid IN is an add-on, increases the number of new systems operators will purchase.
Prepaid IN systems Current prepaid solutions (non-IN based) are expensive, require duplicate switch fabric and will not be built out to support such a high level of subscriber base. In addition, the operator must support intelligent networking capability to support IN functionality over the long term to maintain competitive advantage. All GSM operators currently support IN functionality, and all other operators will certainly implement IN by the year 2005. Very few of the Tier 2 and Tier 3 prepaid solutions today are IN based. This means that the entire Tier 2 and Tier 3 operator base is a potential market for Prepaid IN over the next five years, with over 5,000 operators to be in operation by the year 2005. The average price for a Prepaid IN solution will be $1.0 million for Tier 2 and 3 operators.
OSS Telecom Technology Target Customers Within OSS Telecom Technologys stated primary and secondary markets, OSS Telecom Technology has developed a “Stepped Target Market Strategy,” or STMS. This strategy is based on two key elements:
That telecom operators have a strong desire to purchase from a vendor with installations similar to their own, and;
That larger CCB vendors are moving upscale to larger operators as they gain more experience and as IT resources continue to become scarce. The primary market of this type of CCB vendors is Tier 1 operators.
OSS Telecom Technologys first installation base consists primarily of GSM operators in the range of 25,000 subscribers and under. Through a stepped strategy, OSS Telecom Technology is moving in three directions:
Using this install base to move up to the next band of subscribers within the GSM market;
Leveraging GSM wireless experience to penetrate other wireless types in the same subscriber bands;
Working with GSM operators to provide convergent services such as cable, Internet, and wireline, and therefore gaining experience in these disciplines.
This strategy currently puts OSS Telecom Technology in the Tier 3 (less than 100,000 subscribers) market, with each step carefully planned to be sure we do not overreach. It is key to this strategy to maintain all customers as long-term partners and referenceable sites. We want to under-commit and over-deliver in each step of this strategy. By repeating this strategy, over a five-year period OSS Telecom Technology will offer a wide variety of convergent solutions to Tier 3 and then Tier 2 (100 thousand to 1 million subscribers) telecom operators.
Geographic Market The STMS strategy has been used to develop geographic markets by first developing the geographic market closest to home and expanding as one develops experience. With a large center of excellence in Asia, this was the first market to exploit. Asia and Europe are predominately GSM. As a result, moving from Asia to Europe makes perfect sense.
Latin America is expanding the installed base of GSM systems. Therefore, OSS Telecom Technology has made its first step in Latin America and will move forward from there. In addition to Asia, the U.S. and Europe were early targets for consulting services because much of the technology and new solutions are developed in these regions.
OSS Telecom Technologys target market is focused on providing OSS solutions to both Tier 3 and Tier 2 operators worldwide. The priority of issues which drive the purchase decision for Tier 3 operators is slightly different than for Tier 1 operators. Understanding these priorities is key to developing the OSS Telecom Technology value proposition within its target market.
A list of drivers is given below to compare Tier 3 priorities against Tier 1 priorities as part of the selection criteria for selecting a vendor. These priorities are important to consider to differentiate OSS Telecom Technology from Tier 1 CCB vendors.
OSS Telecom Technologys position relative to these drivers:
Price: OSS Telecom Technology will maintain a price that is 20% less than Tier 1 market vendors for licenses and 40% less for services. The service price is significant because it is often 50% or more of the purchase amount for many CCB vendors.
Features: Within the given product module, OSS Telecom Technology will offer features that meet or exceed Tier 1 vendors. OSS Telecom Technology will also maintain a robust product road map that is discussed and approved by vendors in a user group format.
Service Offering: While service offerings to Tier 3 operators from other CCB vendors are shrinking or too expensive, OSS Telecom Technology will offer a complete package of services at affordable prices.
Product Flexibility: OSS Telecom Technology will strive to maintain a lead in the ability of the operator to easily add schemes and re-configure the system. In addition, OSS Telecom Technology will